Abstract. A sender wants a receiver to take a certain action, but the receiver takes the action only if his expectation of the state exceeds a private cutoff. The sender publicly chooses what information to acquire, but there is uncertainty about whether she will have evidence to prove it. If she obtains evidence, she may voluntarily disclose it or pretend to not have obtained it. If the uncertainty is high, we show that there is binary certification: all that is revealed is whether the state is above or below a certain threshold. The sender's uncertainty about the receiver's cutoff leads her to prefer disclosure of low states and pooling of high states, but the uncertainty about whether she has evidence leads to inability to commit to disclose and forces pooling at the bottom of the state distribution. When uncertainty is low, there is still pooling at the top and bottom, but also full revelation of intermediate states. When there is binary certification, the two forces interact in a subtle way: there is more pooling at the top than the seller would otherwise choose because she can use it to commit to have less pooling at the bottom.
draft coming soon
Abstract. We analyze screening with frame-dependent valuations. A monopolist principal designs an extensive-form decision problem with frames at each stage. This allows the firm to induce dynamic inconsistency and thereby reduce information rents. We show that the optimal extensive form has a simple three-stage structure and uses only the two highest frames (high-low-high). Some types buy in the ﬁrst stage, while others continue the interaction and buy at the last stage. The principal offers unchosen decoy contracts. Sophisticated consumers correctly anticipate that if they deviated, they would choose a decoy, which they want to avoid in a lower frame. This eliminates incentive compatibility constraints into types who don’t buy in the ﬁrst stage. With naive consumers, the principal can perfectly screen by cognitive type and extract full surplus from naifs.
PDF April 18, 2019
Abstract. A sender commissions a study to persuade a receiver, but influences the report with some state-dependent probability. We show that increasing this probability can benefit the receiver and can lead to a discontinuous drop in the sender’s payoffs. We also examine a public-persuasion setting, where we show the sender especially prefers her report to be immune to influence in bad states. To derive our results, we geometrically characterize the sender’s highest equilibrium payoff, which is based on the concave envelope of her capped value function.
Abstract. A common feature of most models of updating under ambiguity is that new information may increase the relevant ambiguity: the set of priors may 'dilate.' We test experimentally one sharp case: agents bet on a risky urn and get information that is truthful or not based on the draw from a Ellsberg urn. Under typical models, ambiguity averse agents should lower their value of bets after the information. Instead, we find that it remains unchanged. Ambiguity seeking agents increase their value substantially. We also test the case of bets on ambiguous urns and find sizable reactions from all subjects.
draft coming soon