We place an upper bound on the degree to which policies aimed at improving the information deficiencies of patients may lead to greater adherence to clinical guidelines and recommended practices. To do so, we compare the degree of adherence attained by a group of patients that should have the best possible information on health care practices-i.e., physicians as patients-with that attained by a comparable group of non-physician patients, taking various steps to account for unobservable differences between the two groups. Our results suggest that physicians, at best, do only slightly better in adhering to both low- and high-value care guidelines than non-physicians.
{"title":"Is Great Information Good Enough? Evidence from Physicians as Patients","authors":"Michael D. Frakes, J. Gruber, A. Jena","doi":"10.3386/W26038","DOIUrl":"https://doi.org/10.3386/W26038","url":null,"abstract":"We place an upper bound on the degree to which policies aimed at improving the information deficiencies of patients may lead to greater adherence to clinical guidelines and recommended practices. To do so, we compare the degree of adherence attained by a group of patients that should have the best possible information on health care practices-i.e., physicians as patients-with that attained by a comparable group of non-physician patients, taking various steps to account for unobservable differences between the two groups. Our results suggest that physicians, at best, do only slightly better in adhering to both low- and high-value care guidelines than non-physicians.","PeriodicalId":232169,"journal":{"name":"ERN: Other Microeconomics: Asymmetric & Private Information (Topic)","volume":"44 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117290332","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper investigates whether a contest organizer should disclose private information about bidders' abilities in an all-pay auction. Bidders' abilities are affiliated through an underlying state of the world and are accessible by the contest organizer. The organizer decides whether to disclose this information publicly. I find that the revenue ranking between full concealment and full revealing depends on the affiliation of bidders' abilities and the number of bidders. Full concealment renders a higher expected revenue if bidders' abilities are not too much affiliated or if there are two bidders. If the affiliation is too significant and there are more than two bidders, the revenue ranking between the two disclosure policies can hold in either direction. In particular, if the difference between low-ability and high-ability is not too much different and if either the chance to be of low-ability is sufficiently small in any state of the world or the number of bidders is sufficiently large, full disclosure dominates full concealment in terms of expected revenue. However, bidders strictly prefer full disclosure unless the states of the world are equivalent.
{"title":"Disclosure Policies in All-pay Auctions with Affiliated Abilities","authors":"Bo Chen","doi":"10.2139/ssrn.3406595","DOIUrl":"https://doi.org/10.2139/ssrn.3406595","url":null,"abstract":"This paper investigates whether a contest organizer should disclose private information about bidders' abilities in an all-pay auction. Bidders' abilities are affiliated through an underlying state of the world and are accessible by the contest organizer. The organizer decides whether to disclose this information publicly. I find that the revenue ranking between full concealment and full revealing depends on the affiliation of bidders' abilities and the number of bidders. Full concealment renders a higher expected revenue if bidders' abilities are not too much affiliated or if there are two bidders. If the affiliation is too significant and there are more than two bidders, the revenue ranking between the two disclosure policies can hold in either direction. In particular, if the difference between low-ability and high-ability is not too much different and if either the chance to be of low-ability is sufficiently small in any state of the world or the number of bidders is sufficiently large, full disclosure dominates full concealment in terms of expected revenue. However, bidders strictly prefer full disclosure unless the states of the world are equivalent.","PeriodicalId":232169,"journal":{"name":"ERN: Other Microeconomics: Asymmetric & Private Information (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-06-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130467508","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In practice, interest expense can account for a large proportion of firms' costs, while the interest rate is often influenced by a firm's market prospect. In the presence of information asymmetry, a firm may have an incentive to borrow a larger amount, thereby signaling a high prospect to the lenders. On the other hand, such market confidence, if publicly shown, may stimulate competitors to respond more aggressively, which may incentivize the firm to instead borrow a smaller amount. Motivated by such observations, we investigate the determinants of a firm's financing and information revelation strategy. First, under public financing where the borrowing information is openly accessible, we find that when the firm's internal capital level and the market competition intensity are both low, the firm over-finances, if the market prospect is high, so as to credibly reveal its information to lower the interest rate. On the contrary, when the firm's internal capital level and the competition intensity are both high, the firm under-finances, if the market prospect is low, to credibly signal its information to alleviate competition. In the remaining scenarios, these two opposing incentives are surprisingly neutralized -- the firm neither imitates nor signals -- and the first-best solution is attained. As such, rather counter-intuitively, we show that an increase of the internal capital level can sometimes even be harmful for the firm while benefiting the competitor, and a more competitive market may not always be detrimental. Second, we investigate when the firm may seek private financing so that the borrowing information is not publicly revealed. A classical signaling game arises between the firm and the lender, while the competitor relies on the prior information to make its response. We find that private financing emerges as an equilibrium outcome only when the firm's internal capital level is sufficiently high and the competition intensity is intermediate.
{"title":"Strategic Financing and Information Revelation Amid Market Competition","authors":"Xinyi Zhao, Guoming Lai, Wenqiang Xiao","doi":"10.2139/ssrn.3452885","DOIUrl":"https://doi.org/10.2139/ssrn.3452885","url":null,"abstract":"In practice, interest expense can account for a large proportion of firms' costs, while the interest rate is often influenced by a firm's market prospect. In the presence of information asymmetry, a firm may have an incentive to borrow a larger amount, thereby signaling a high prospect to the lenders. On the other hand, such market confidence, if publicly shown, may stimulate competitors to respond more aggressively, which may incentivize the firm to instead borrow a smaller amount. Motivated by such observations, we investigate the determinants of a firm's financing and information revelation strategy. First, under public financing where the borrowing information is openly accessible, we find that when the firm's internal capital level and the market competition intensity are both low, the firm over-finances, if the market prospect is high, so as to credibly reveal its information to lower the interest rate. On the contrary, when the firm's internal capital level and the competition intensity are both high, the firm under-finances, if the market prospect is low, to credibly signal its information to alleviate competition. In the remaining scenarios, these two opposing incentives are surprisingly neutralized -- the firm neither imitates nor signals -- and the first-best solution is attained. As such, rather counter-intuitively, we show that an increase of the internal capital level can sometimes even be harmful for the firm while benefiting the competitor, and a more competitive market may not always be detrimental. Second, we investigate when the firm may seek private financing so that the borrowing information is not publicly revealed. A classical signaling game arises between the firm and the lender, while the competitor relies on the prior information to make its response. We find that private financing emerges as an equilibrium outcome only when the firm's internal capital level is sufficiently high and the competition intensity is intermediate.","PeriodicalId":232169,"journal":{"name":"ERN: Other Microeconomics: Asymmetric & Private Information (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-06-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128755685","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I study bargaining over prices between two investors in financial over-the-counter markets with asymmetric information. I focus on environments in which an asset owner has private information about both her liquidity state and asset quality, and so a buyer is uncertain about the owner's true motive for selling--whether it is because of a liquidity need or because of a low asset valuation. I apply the concept of neutral bargaining solution to characterize the prices at which the investors trade with each other. I illustrate the implications for asset prices in over-the-counter markets where private information may be prevalent.
{"title":"Neutral Bargaining in Financial Over-The-Counter Markets","authors":"Jin Yeub Kim","doi":"10.2139/ssrn.3294396","DOIUrl":"https://doi.org/10.2139/ssrn.3294396","url":null,"abstract":"I study bargaining over prices between two investors in financial over-the-counter markets with asymmetric information. I focus on environments in which an asset owner has private information about both her liquidity state and asset quality, and so a buyer is uncertain about the owner's true motive for selling--whether it is because of a liquidity need or because of a low asset valuation. I apply the concept of neutral bargaining solution to characterize the prices at which the investors trade with each other. I illustrate the implications for asset prices in over-the-counter markets where private information may be prevalent.","PeriodicalId":232169,"journal":{"name":"ERN: Other Microeconomics: Asymmetric & Private Information (Topic)","volume":"159 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127927109","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study the relationship between two-agent implementation problems and the notion of interim efficiency due to Holmström and Myerson (1983) in Bayesian environments with private values and independent types. We present a general property, Bayesian efficiency, and show that it is sufficient for implementation of social choice functions. We also show that this condition is sufficient for implementation of social choice sets under a weak domain restriction - in particular, no economic condition is required. As an application, we show that the generalized two-person Nash bargaining solution, due to Myerson (1984), is Bayesian efficient.
{"title":"(Interim) Bayesian efficiency implies two-agent Bayesian implementation","authors":"Ville Korpela, M. Lombardi","doi":"10.2139/ssrn.3134454","DOIUrl":"https://doi.org/10.2139/ssrn.3134454","url":null,"abstract":"We study the relationship between two-agent implementation problems and the notion<br>of interim efficiency due to Holmström and Myerson (1983) in Bayesian environments<br>with private values and independent types. We present a general property, Bayesian<br>efficiency, and show that it is sufficient for implementation of social choice functions.<br>We also show that this condition is sufficient for implementation of social choice sets<br>under a weak domain restriction - in particular, no economic condition is required. As<br>an application, we show that the generalized two-person Nash bargaining solution, due<br>to Myerson (1984), is Bayesian efficient.","PeriodicalId":232169,"journal":{"name":"ERN: Other Microeconomics: Asymmetric & Private Information (Topic)","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-04-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128498864","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper compares outcomes from informally negotiated oil and gas leases to those awarded via centralized auction. We focus on Texas, where legislative decisions in the early twentieth century assigned thousands of proximate parcels to different mineral allocation mechanisms. We show that during the fracking boom, which began unexpectedly decades later, auctioned leases generated at least 55 percent larger up-front payments and 40 percent more output than negotiated leases did. These results suggest large potential gains from employing centralized, formal mechanisms in markets that traditionally allocate in an unstructured fashion, including the broader $3 trillion market for privately owned minerals. (JEL D44, L71, Q35)
{"title":"Relinquishing Riches: Auctions vs Informal Negotiations in Texas Oil and Gas Leasing","authors":"Thomas R. Covert, R. Sweeney","doi":"10.2139/ssrn.3363682","DOIUrl":"https://doi.org/10.2139/ssrn.3363682","url":null,"abstract":"This paper compares outcomes from informally negotiated oil and gas leases to those awarded via centralized auction. We focus on Texas, where legislative decisions in the early twentieth century assigned thousands of proximate parcels to different mineral allocation mechanisms. We show that during the fracking boom, which began unexpectedly decades later, auctioned leases generated at least 55 percent larger up-front payments and 40 percent more output than negotiated leases did. These results suggest large potential gains from employing centralized, formal mechanisms in markets that traditionally allocate in an unstructured fashion, including the broader $3 trillion market for privately owned minerals. (JEL D44, L71, Q35)","PeriodicalId":232169,"journal":{"name":"ERN: Other Microeconomics: Asymmetric & Private Information (Topic)","volume":"137 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132155215","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I study information diffusion in a social network where a third party can control the precision of information as well as who initially receives information. Applications include spreading of news by digital media outlets, lobbyists persuading senators to contribute to a project and others. A designer engages in a bayesian persuasion game with multiple agents, but is constrained to send information privately to a subset of agents. The agents can communicate this information to each other through links in a social network. The designer relies on this word-of-mouth communication channel to diffuse information. The optimal precision of information sent by the designer reflects a fundamental tradeoff: precise information increases diffusion, but reduces the designer’s ability to manipulate the agents’ beliefs to- wards his objective. The optimal seeding strategy involves choosing an agent with the highest “influence”, a novel centrality measure that is determined in endogenously by information accuracy and the network structure. As preferences become more diverse, I show that there exists equilibrium with sub- optimal spreading where the designer caters only to agents relatively more aligned towards his objective.
{"title":"Who to share information with? A model of strategic diffusion in social networks","authors":"Shomak Chakrabarti","doi":"10.2139/ssrn.3390062","DOIUrl":"https://doi.org/10.2139/ssrn.3390062","url":null,"abstract":"I study information diffusion in a social network where a third party can control the precision of information as well as who initially receives information. Applications include spreading of news by digital media outlets, lobbyists persuading senators to contribute to a project and others. A designer engages in a bayesian persuasion game with multiple agents, but is constrained to send information privately to a subset of agents. The agents can communicate this information to each other through links in a social network. The designer relies on this word-of-mouth communication channel to diffuse information. The optimal precision of information sent by the designer reflects a fundamental tradeoff: precise information increases diffusion, but reduces the designer’s ability to manipulate the agents’ beliefs to- wards his objective. The optimal seeding strategy involves choosing an agent with the highest “influence”, a novel centrality measure that is determined in endogenously by information accuracy and the network structure. As preferences become more diverse, I show that there exists equilibrium with sub- optimal spreading where the designer caters only to agents relatively more aligned towards his objective.","PeriodicalId":232169,"journal":{"name":"ERN: Other Microeconomics: Asymmetric & Private Information (Topic)","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115137337","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper studies pre-match investment competition with upper and lower bounds on feasible transfers to sellers in a general signaling environment, where the types of buyers and sellers are private information and the surplus may depend on both types and investments. Bounded transfers create methodological challenges - e.g., externalities in the bottom match, limits of a separate investment reward (or market utility) schedule for each side - that would be present even in a large market. To overcome such challenges, this paper proposes a notion of equilibrium that incorporates strategic behavior of a continuum of agents. Given our notion of equilibrium with bounded transfers, our model explains remarkably well why sellers and buyers in the bottom tail of the match distribution are stuck in a vicious cycle of a rat race, and how stars who stand out from the rest endogenously arise through pre-match investment competition.
{"title":"Pre-Match Investment Competition with Bounded Transfers","authors":"Seungjin Han","doi":"10.2139/ssrn.3326093","DOIUrl":"https://doi.org/10.2139/ssrn.3326093","url":null,"abstract":"This paper studies pre-match investment competition with upper and lower bounds on feasible transfers to sellers in a general signaling environment, where the types of buyers and sellers are private information and the surplus may depend on both types and investments. Bounded transfers create methodological challenges - e.g., externalities in the bottom match, limits of a separate investment reward (or market utility) schedule for each side - that would be present even in a large market. To overcome such challenges, this paper proposes a notion of equilibrium that incorporates strategic behavior of a continuum of agents. Given our notion of equilibrium with bounded transfers, our model explains remarkably well why sellers and buyers in the bottom tail of the match distribution are stuck in a vicious cycle of a rat race, and how stars who stand out from the rest endogenously arise through pre-match investment competition.","PeriodicalId":232169,"journal":{"name":"ERN: Other Microeconomics: Asymmetric & Private Information (Topic)","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-01-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124044874","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We show that too much meritocracy, modeled as accuracy of performance ranking in contests, can be a bad thing: in contests with homogeneous agents, it reduces output and is Pareto inefficient. In contests with sufficiently heterogeneous agents, discouragement and complacency effects further reduce the benefits of meritocracy. Perfect meritocracy may be optimal only for intermediate levels of heterogeneity.
{"title":"The Limits of Meritocracy","authors":"J. Morgan, Justin Tumlinson, Felix Várdy","doi":"10.2139/ssrn.3216950","DOIUrl":"https://doi.org/10.2139/ssrn.3216950","url":null,"abstract":"We show that too much meritocracy, modeled as accuracy of performance ranking in contests, can be a bad thing: in contests with homogeneous agents, it reduces output and is Pareto inefficient. In contests with sufficiently heterogeneous agents, discouragement and complacency effects further reduce the benefits of meritocracy. Perfect meritocracy may be optimal only for intermediate levels of heterogeneity.","PeriodicalId":232169,"journal":{"name":"ERN: Other Microeconomics: Asymmetric & Private Information (Topic)","volume":"2 4","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120917491","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract This paper presents an analysis of environmental policy in imperfectly competitive market with publicly disclosed and privately-held information about costs. We examine the potential asymmetry-reducing role of disclosure and its impact on setting environmental taxes. From a policy perspective, our findings show that disclosure with verifiable reports, is a valuable public good, provides greater transparency in the market, and is generally efficiency enhancing. Results suggest that access to publicly disclosed information enables the fine-tuning of the tax rules towards specific environmental circumstances and improves the ability of the regulator to levy firm-specific environmental taxes. Further, while we do not attempt to analyze the exchange of information process between players, our findings show that, despite its advantages, exogenously disclosed information can be double-edged sword since it may also produce anticompetitive effects by facilitating collusive behavior. Information sharing between firms may occur and thus lead to a superior outcome in terms of industry output and emissions, which undermines environmental policy performance.
{"title":"On the Social Value of Publicly Disclosed Information and Environmental Regulation","authors":"J. Elnaboulsi, Wassim Daher, Yiğit Sağlam","doi":"10.2139/ssrn.3510743","DOIUrl":"https://doi.org/10.2139/ssrn.3510743","url":null,"abstract":"Abstract This paper presents an analysis of environmental policy in imperfectly competitive market with publicly disclosed and privately-held information about costs. We examine the potential asymmetry-reducing role of disclosure and its impact on setting environmental taxes. From a policy perspective, our findings show that disclosure with verifiable reports, is a valuable public good, provides greater transparency in the market, and is generally efficiency enhancing. Results suggest that access to publicly disclosed information enables the fine-tuning of the tax rules towards specific environmental circumstances and improves the ability of the regulator to levy firm-specific environmental taxes. Further, while we do not attempt to analyze the exchange of information process between players, our findings show that, despite its advantages, exogenously disclosed information can be double-edged sword since it may also produce anticompetitive effects by facilitating collusive behavior. Information sharing between firms may occur and thus lead to a superior outcome in terms of industry output and emissions, which undermines environmental policy performance.","PeriodicalId":232169,"journal":{"name":"ERN: Other Microeconomics: Asymmetric & Private Information (Topic)","volume":"258 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123066123","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：