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on Microeconomics |
| By: | Joshua S. Gans |
| Abstract: | We develop a model of strategic information provision where politicians choose how to allocate limited disclosure across multiple policy dimensions. Citizens are heterogeneous statistical learners who interpret data differently, following Liang (2021). Our key insight: spreading information thinly across many dimensions (“flooding the zone”) maximizes disagreement among citizens, preventing the coordination needed for collective accountability. We characterize equilibrium disclosure strategies and show that politicians with unfavorable private information flood to prevent investigation, while those with favorable information choose intermediate disclosure levels that balance reputation building with enabling scrutiny. The model yields both pooling equilibria that create “transparency theater”—where all politicians provide vast but shallow information—and separating equilibria where disclosure strategies reveal type. We derive threshold conditions showing that flooding dominates when investigation stakes are asymmetric, communication technology enables high dimensionality, and citizen populations are heterogeneous in their information processing. Extensions examine strategic interactions between competing politicians and the mediating role of information platforms in either amplifying or constraining flooding strategies. |
| JEL: | C72 D72 D80 D83 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33933 |
| By: | Henrique Castro-Pires; Deniz Kattwinkel; Jan Knoepfle |
| Abstract: | We characterize the set of incentive compatible mechanisms in problems with hidden productivity types and flexible hidden actions. We demonstrate the tractability of the characterization with applications. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2506.12979 |
| By: | Kai Fischer; Simon Martin; Karl Schlag |
| Abstract: | We develop a tractable model of competitive price cycles where prices are chosen alternatingly and consumers have heterogenous information. The model yields sharp empirical predictions about price patterns, impact of captive consumers and pass-through. Using rich station-level price data from the German retail gasoline market, we test these predictions. Consistent with the model, we find price cycles, characterized by frequent small price cuts and infrequent sharp increases. These cycles shorten as costs rise and are more likely to be initiated by firms with more captive consumers. Pass-through of input costs is incomplete, in contrast to alternative theories. |
| Keywords: | price cycles, tacit collusion, coordination, gasoline markets |
| JEL: | D43 D83 L11 L41 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11971 |
| By: | Gaëtan Fournier (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Alberto Grillo (AMU - Aix Marseille Université, AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Yevgeny Tsodikovich (Bar-Ilan University [Israël], AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We study candidates' position adjustments in response to information about voters' preferences. Repositioning allows candidates to move closer to the median voter, but it incurs financial and electoral costs. In a subgame-perfect equilibrium, candidates diverge from the center ex ante if the costs of adjustment are sufficiently large. This allows them to increase the chances of a costless victory when the information is strongly in their favor. Our theory highlights a dynamic of moderation during the campaign stage in competitive elections, as well as a prominent role for minor adjustments made preemptively by the favored candidate. JEL Classification: C72, D72, D82 Model. We enrich the Downs-Hotelling framework by introducing an information shock, creating a two-stage game. The shock reveals the location of the median voter. This captures the idea that voters' aggregate preferences fluctuate over time and that their current leanings are disclosed during the electoral cam-This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made. |
| Keywords: | flip-flop, imperfect information, spatial voting, re-positioning |
| Date: | 2025–06–04 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05105112 |
| By: | Claude d'Aspremont; Rodolphe Dos Santos Ferreira |
| Abstract: | We consider the concept of Cournotian monopolistic competition equilibrium as a tractable way of taking the strategic behaviour of large firms into account in a general equilibrium framework. Existence is obtained under simple assumptions, ensuring in particular uniqueness of Cournot equilibrium for each group of firms. An extension of the concept, allowing intrasectoral competitive behaviour to vary in intensity is also examined. |
| Keywords: | Oligopolistic and monopolistic competition. Uniqueness of Cournot equilibrium. |
| JEL: | D43 D51 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ulp:sbbeta:2025-21 |
| By: | Willy Lefez (Humboldt Universität) |
| Abstract: | We study price discrimination by a monopolistic seller that endogenously produces a market segmentation at a cost, and question the efficiency of the production of market segmentations led by private incentives. We show that the efficient market segmentation gives all the gains in total surplus to the buyer, and the seller profit stays at the uniform profit level. Our result suggests that the private production of information by sellers to price discriminate is significantly inefficient. |
| Keywords: | Price Discrimination, Cost of Information, Production of Information.; cost of information; production of information; |
| JEL: | D42 D83 L12 |
| Date: | 2025–07–02 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:535 |
| By: | Gabriel, Nathan; Bell, Adrian V.; Smaldino, Paul E. |
| Abstract: | Individual social identities indicate group affiliations and are typically associated with group-typical preferences, signals that indicate group membership, and the propensity to condition actions on the social signals of others, resulting in group-differentiated interaction norms. Past work modeling identity signaling and coordination has typically assumed that individuals belong to one of a discrete set of groups. Yet individuals can simultaneously belong to multiple groups, which may be nested within larger groupings. Here, we introduce the generalized Bach or Stravinsky game, a coordination game with ordered preferences, which allows us to construct a model that captures the overlapping and hierarchical nature of social identity. Our model unifies several prior results into a single framework, including results related to coordination, minority disadvantage, and cross-cultural competence. Our model also allows agents to express complex social identities through multidimensional signaling, which we use to explore a variety of complex group structures. Our consideration of intersectional identities exposes flaws in naive measures of group structure, illustrating how empirical studies may overlook some social identities if they do not consider the behaviors that those identities function to afford. |
| Date: | 2025–06–27 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:w246t_v1 |
| By: | Gian Luigi Albano (Consip S.p.A. and LUISS Guido Carli University); Walter Ferrarese (Universitat de les Illes Balears); Roberto Pezzuto (DEF, University of Rome "Tor Vergata") |
| Abstract: | We show that in a single-lot low-price auction, a merger can be simultaneously profitable and increase the buyer’s surplus, even in the absence of cost synergies. Thus the buyer’s purchasing price may go down even when a lower number of bids is submitted. In determining our main result we highlight the role of firms’ cost exhibiting a discontinuity due to short-term capacity constraints or non-linear contractual agreements. The paper contributes to a new strand of literature showing that in bidding markets the lack of merger-induced synergies does not necessarily imply worse outcomes for the buyer. Hence the Authorities need not worry about resorting to possibly convoluted assessment of the attainability of this kind of efficiencies. |
| Keywords: | Horizontal Mergers, Buyer Surplus, Cost Discontinuity |
| JEL: | L11 L23 L51 |
| Date: | 2025–07–09 |
| URL: | https://d.repec.org/n?u=RePEc:rtv:ceisrp:607 |
| By: | Suen, Richard M. H. |
| Abstract: | Why do people form polarised opinions after receiving the same information? Why does disagreement persist even when public information is abundant? We show that a Bayesian model with potentially biased public signals can answer these questions. When agents are uncertain and disagree about the bias in the signals, persistent disagreement and opinion polarisation can readily emerge. This happens because uncertainty surrounding the bias Induces agents with diverse initial beliefs to form drastically different posterior estimates. Prolonged exposure to these signals can in some cases drive the agents' opinions further away from each other and also further away from the truth. |
| Keywords: | Bayesian Learning, Biased Signals, Disagreement, Opinion Polarisation. |
| JEL: | C11 D83 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124953 |
| By: | Shurojit Chatterji (Singapore Management University); Takashi Kunimoto (Singapore Management University); Paul Ramos (Singapore Management University) |
| Abstract: | A social choice function (SCF) is said to be Nash implementable (in pure strategies) if there exists a mechanism in which every pure-strategy Nash equilibrium induces outcomes specified by the SCF. The main objective of this paper is to assess the impact of considering mixed-strategy equilibria in Nash implementation. We define compelling Nash implementation as a case where the implementing mechanism possesses a pure-strategy equilibrium that strictly Pareto dominates any undesired mixed-strategy equilibrium. We show that if the finite environment and the SCF to be implemented jointly satisfy what we call Condition COM, then we can construct a finite mechanism which compellingly implements the SCF. We also identify a class of voting environments that satisfies Condition COM, extend Condition COM to accommodate social choice correspondences, and explore a preliminary stability-based justification for the implementing mechanism. Our mechanism has several desirable features: transfers are completely dispensable; only finite mechanisms are considered; integer games are not invoked; and agents’ attitudes toward risk do not affect implementation. |
| Keywords: | Compelling Implementation; Mechanisms; Mixed Strategies; Nash Equilibrium |
| JEL: | C72 D78 D82 |
| Date: | 2025–03–01 |
| URL: | https://d.repec.org/n?u=RePEc:ris:smuesw:021401 |
| By: | Tilman Börgers (University of Michigan); Jiangtao Li (Singapore Management University); Kexin Wang (Singapore Management University) |
| Abstract: | We study the design of mechanisms when the designer faces multiple plausible scenarios and is uncertain about the true scenario. A mechanism is dominated by another if the latter performs at least as well in all plausible scenarios and strictly better in at least one. A mechanism is undominated if no other feasible mechanism dominates it. We show how analyzing undominated mechanisms could be useful and illustrate the tractability of characterizing such mechanisms. This approach provides an alternative criterion for mechanism design under non-Bayesian uncertainty, complementing existing methods. |
| Keywords: | Robust Mechanism Designl; Undominated Mechanisms; Maxmin Approrach; Regret Minimization; Second-pric |
| Date: | 2025–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:ris:smuesw:021402 |