Areas of Interest
Microeconomic Theory
Experimental Economics
Labor Economics
Industrial Organization
Working Papers
Incumbency in Imperfectly Discriminating Contests (Job Market Paper)
This paper is a theoretical examination of a twice repeated contest in which the prize in each period has a common but uncertain value and there are at least two contestants. The contestant who wins in the first period (the incumbent) privately observes the value of the prize in the first period, which is not independent of the value of the prize in the second period. This private information acts as a noisy signal, introducing asymmetric information in the second period. I find that, relative to the case of independent prizes, aggregate effort falls in the second period, but that aggregate effort in the first period increases such that total effort over the two periods increases. Ex ante, the incumbent has a lower probability of winning the second contest than the challengers, despite expending more effort. Prior to this paper, the study of asymmetric information in contests has been limited to one-shot, two-player games, with a perfectly informed player.
An Experimental Investigation of Asymmetric Information in Common-Value Auctions (with Brit Grosskopf and Rajiv Sarin)
This paper experimentally investigates the role of asymmetric information in sealed-bid, first-price auctions with two bidders. The value of the good has a common but uncertain value. Three information structures are examined: 1) Both bidders only know the distribution from which the value of the good is drawn prior to bidding; 2) Both bidders receive noisy signals; 3) Only one bidder observes a noisy signal. The experimental literature regarding common-value auctions is extensive, but the role of asymmetric information has received little attention. I find that bidders who observe a signal overbid relative to Nash predictions, which is consistent with the literature. However, bidders who do not observe a signal underbid relative to Nash predictions by a significant margin. Indeed, when neither bidder observes a signal, bidders bid 42% below the Nash.
Works in Progress
Asymmetric Information in Contests: Theory and Experiments (with Brit Grosskopf and Rajiv Sarin)
This paper investigates the role of asymmetric information in two-player, common-value contests. Two contest models are considered: 1) The imperfectly discriminating contest; 2) the perfectly discriminating contest (first-price, all-pay auctions). Two information structures are considered: 1) Both contestants only know the distribution from which the value of the prize is drawn; 2) One contestant observes a noisy signal. The contribution of this paper is twofold. Theoretical predictions in a perfectly discriminating contest with asymmetric information are introduced (predictions for an imperfectly discriminating contest with asymmetric information are found in my job market paper). Further, this paper is the first experimental analysis of asymmetric information in contests. The experimental sessions for this paper have been completed, and analysis of the data has begun.
Revenue Equivalence with Asymmetric Information
This paper investigates the revenue ranking of auction formats when bidders are asymmetrically informed. While this paper is a work in progress, I do have some interesting revenue equivalence results.
Future Research
There are many topics I would like to study, but there are several ideas that I will work on in the near future.
First, I will theoretically investigate all-pay auctions in which there is uncertainty as to the number of informed bidders.
Second, I will experimentally test the revenue equivalence results found in Revenue Equivalence with Asymmetric Information.
Third, I will experimentally investigate the value of information in common-value auctions. In particular, I will elicit bidder willingness to pay for a signal in a first-price auction.
Fourth, I will experimentally investigate the role of organizational structure on economic performance. In particular, what is the effect of a hierarchal organizational structure in principle agent games (where a principle may act as an agent in a higher tier of an organization)?