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Title: Essays on Screening in Information Markets
Authors: Sartori, Elia
Advisors: Morris, Stephen E
Contributors: Economics Department
Subjects: Economic theory
Issue Date: 2019
Publisher: Princeton, NJ : Princeton University
Abstract: In three essays, this dissertation studies the production and distribution of information goods. In the first chapter, we model information as a digital good. Digital goods are produced along a quality ranking and can be both duplicated and damaged at zero marginal cost. Consumers’ valuation of quality consists of a common decreasing returns component and an heterogeneous component that gives sellers a motive for screening. The monopolist problem is naturally divided into an acquisition and a distribution stage; two interdependent sources of inefficiency, underprovision and quality damaging, emerge. Competition is modeled as a two stage game of perfect information. Welfare comparisons between monopoly and duopoly are ambiguous: additional underacquisition and double spending favor the former, undoing damaging inefficiencies by distributing a positive quality for free favors the latter. The second chapter studies the production of socially relevant information: we model policymaking as a bandit problem where the arms are treatment incentive schemes whose payoff value and correlation is disciplined by an economic theory. We preliminarily associate each multiarmed bandit problem to an uncertainty function so that the implied information function is traded-off one for one with expected utility at each belief state to determine the optimal policy. The uncertainty measure quantifies the estimation content of selection mechanisms. We propose a sampling procedure that validly implements all BDM mechanisms while minimizing the variance of the empirical propensity score and preserving information continuity. Fully voluntary mechanisms are control optimal under linear preferences, but their valid implementation induces the largest variance of the sample size used for estimation. In the third chapter (with Franz Ostrizek) we study a monopolist screening problem with network externalities in consumption and two dimensions of heterogeneity: consumer differ in their susceptibility and influence (to the network effect). We show that the allocation is inefficient if and only if susceptibility is unobservable, while consumers receive rents for their influence only if susceptibility is unobserved and influence is verifiable. The optimal allocation under private information satisfies lexicographic monotonicity; bunching arises around the switching types in the lexicographic order, i.e. highest-influence types adjacent to the next level of susceptibility.
Alternate format: The Mudd Manuscript Library retains one bound copy of each dissertation. Search for these copies in the library's main catalog:
Type of Material: Academic dissertations (Ph.D.)
Language: en
Appears in Collections:Economics

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