Related papers: Signaling Design
We consider the problem faced by a service platform that needs to match limited supply with demand but also to learn the attributes of new users in order to match them better in the future. We introduce a benchmark model with heterogeneous…
This paper considers the use of instruments to identify and estimate private and social returns to education within a model of employer learning. What an instrument identifies depends on whether it is hidden from, or transparent (i.e.,…
We study how increasing competition, by making prizes more unequal, affects effort in contests. In a finite type-space environment, we characterize the equilibrium, analyze the effect of competition under linear costs, and identify…
We develop a market model in which products generate state-dependent potential hidden charges. Firms differ in their ability to realize this potential. Unlike firms, consumers do not observe the state. They try to infer hidden charges from…
In this paper, we examine in an abstract framework, how a tradeoff between efficiency and robustness arises in different dynamic oligopolistic market architectures. We consider a market in which there is a monopolistic resource provider and…
This paper studies Markov perfect equilibria in a repeated duopoly model where sellers choose algorithms. An algorithm is a mapping from the competitor's price to own price. Once set, algorithms respond quickly. Customers arrive randomly…
We study competitive equilibria in the classic Shapley-Shubik assignment model with indivisible goods and unit-demand buyers, with budget constraints: buyers can specify a maximum price they are willing to pay for each item, beyond which…
We study a market mechanism that sets edge prices to incentivize strategic agents to efficiently share limited network capacity. In this market, agents form coalitions, with each coalition sharing a unit capacity of a selected route and…
We consider a market of risky financial assets whose participants are an informed trader, a representative uninformed trader, and noisy liquidity providers. We prove the existence of a market-clearing equilibrium when the insider…
This paper proposes a model to explain the potential role of inter-group conflicts in determining the rise and fall of signaling norms. Individuals in a population are characterized by high and low productivity types and they are matched in…
In social learning environments, agents acquire information from both private signals and the observed actions of predecessors, referred to as history. We define the value of history as the gain in expected payoff from accessing both the…
Platform giants in China have operated with persistently compressed margins in highly concentrated markets for much of the past decade, despite market shares exceeding 60\% in core segments. Standard theory predicts otherwise: either the…
Many experimental studies report that economics students tend to act more selfishly than students of other disciplines, a finding that received widespread public and professional attention. Two main explanations that the existing literature…
Mechanism design has traditionally assumed that the set of participants are fixed and known to the mechanism (the market owner) in advance. However, in practice, the market owner can only directly reach a small number of participants (her…
This paper introduces an assignment model with concave costs of skill gaps, which arise generally when firms mitigate costs of mismatch as in Stigler (1939) and Laffont and Tirole (1986, 1991). Concave costs of skill gaps imply that the…
Status signaling drives human behavior and the allocation of scarce resources such as mating opportunities, yet the generative mechanisms governing how specific goods, signals, or behaviors acquire prestige remain a puzzle. Classical…
We study competition between firms in labor markets, following a combinatorial model suggested by Kelso and Crawford [1982]. In this model, each firm is trying to recruit workers by offering a higher salary than its competitors, and its…
We study the effects of allowing paid prioritization arrangements in a market with content provider (CP) competition. We consider competing CPs who pay prioritization fees to a monopolistic ISP so as to offset the ISP's cost for investing…
In science as elsewhere, attention is a limited resource and scientists compete with one another to produce the most exciting, novel and impactful results. We develop a game-theoretic model to explore how such competition influences the…
Neoclassical economics has two theories of competition between profit-maximizing firms (Marshallian and Cournot-Nash) that start from different premises about the degree of strategic interaction between firms, yet reach the same result,…