Economics Subject Area, Room P309
Phone: +44 (0)20 7000 8411
Fax: +44 (0)20 7000 8401
I also act as co-editor of
the B.E. Journal of Theoretical
Economics, and serve as member of the editorial board of the Review of Economic Studies and the Journal of Prediction
Markets.
This page collects links to
my papers:
Recent Working Papers
(Mis)selling through Agents, with Roman
Inderst
How to
incentivize sales agents to sell, but not to “missell”
to customers for whom the product is unsuitable? Analysis of
the internal organization of the sales process, the commitment effect of self
regulation, and the role for policy intervention.
Aggregation of Information and Beliefs in Prediction Markets,
with Peter Norman Sørensen
Equilibrium analysis of a prediction market when traders have
heterogeneous priors and private information. When agents can invest a limited
amount of money in this market (or their absolute risk aversion is decreasing
in wealth), the equilibrium price under-reacts to information.
Information Sharing in Common Agency: When is Transparency Good?,
with Norbert Maier
When should
principals dealing with a common agent share their individual performance
measures about the agent's unobservable effort?
Noise, Information, and the Favorite-Longshot
Bias, with Peter Norman Sørensen, peer
reviewed by NAJ Economics 2005, 11:3
A new model
of parimutuel betting with private information
provides a simple explanation for the favorite-longshot
bias in terms of the amount of information relative to noise present in the
market.
The Timing of Parimutuel Bets,
with Peter Norman Sørensen
Timing of parimutuel bets driven by two incentives: bettors want to
place large early bets to pre-empt the rivals, but also want to wait to conceal
information.
Parimutuel versus Fixed-Odds Markets, with Peter Norman Sørensen
Comparison
of equilibrium outcomes in parimutuel and fixed-odds
competitive markets with privately informed bettors.
Forecasting and Rank-Order Contests, with Peter Norman Sørensen
Characterization of equilibrium in Hotelling
location model with private information, with applications to strategic
forecasting and political economy.
Published Papers
Monopoly Pricing in the Binary Herding Model, with Subir Bose, Gerhard Orosel
and Lise Vesterlund, Economic Theory, forthcoming. [preprint]
Full characterization of monopoly prices and learning
dynamics when buyers have binary signals about the quality of the good sold and
observe the history of past purchases.
Bank Mergers and Diversification:
Implications for Competition Policy, with Albert Banal Estanol, European Financial Management, June
2007, 13(3), 578–590. [preprint]
Risk-averse banks first merge and then compete in the markets for loans and deposits, in the presence of interest rate risk and default risk for individual loans. If depositors have more correlated shocks than borrowers, bank mergers are relatively worse for depositors than for borrowers.
Credulity, Lies, and Costly Talk, with Navin
Kartik and Francesco Squintani, Journal of
Economic Theory, May 2007, 134 (1), 93–116. [preprint]
Language inflation and deception result when either the receiver is credulous or the sender finds it costly to misrepresent information (due to legal, technological, or moral constraints)—subsumes the first part of working paper “Non-Fully Strategic Information Transmission”.
Outcome Manipulation in Corporate Prediction Markets, with Peter Norman Sørensen, Journal of the European Economic
Association, Papers and Proceedings, April–May 2007, 5(2–3), 554–563.
Analysis of
the amount of outcome manipulation (and impact on prices) resulting in a simple
model of a corporate prediction market.
Naive Audience and Communication Bias, with Francesco
Squintani, International Journal of Game Theory, December
2006, 35 (1), 129–150. [preprint]
The amount of information that is revealed to strategic receivers increases in the fraction of naive receivers and in the informational advantage of the sender, whereas it decreases in level of the conflict of interest—supersedes the second part of working paper “Non-Fully Strategic Information Transmission”.
Dynamic Monopoly Pricing
and Herding, with Subir Bose, Gerhard Orosel
and Lise Vesterlund, RAND Journal
of Economics, Winter 2006, 37 (4), 912–930.
Dynamic pricing by a monopolist selling to buyers who learn from each
other’s purchases, with implications for herd behavior
and welfare.
Mergers
with Product Market Risk, with Albert Banal Estanol, Journal of Economics & Management
Strategy, Fall 2006, 15(3), 577–608. [preprint]
Strategic
implications of risk sharing in mergers, with predictions for the method of
payment used (cash versus shares).
The Strategy of
Professional Forecasting, with Peter Norman Sørensen, Journal
of Financial Economics, August 2006, 81(2), 441–466. [preprint]
Framework
for modeling strategic behavior
of professional forecasters: (1) Concern for perceived talent leads to
excessive conformity if the market is naive and loss of information if the
market is rational. (2) Competition for best accuracy leads to excessive
forecast differentiation.
Reputational Cheap Talk,
with Peter Norman Sørensen,
RAND Journal of Economics, Spring 2006, 37(1),
155–175.
Communication
by an expert concerned about appearing to be well informed, part II—general
analysis with focus on incentives to deviate from truthtelling,
effect of self-knowledge of information quality, and multiple experts speaking
simultaneously.
Professional Advice,
with Peter Norman Sørensen,
Journal of Economic Theory, January 2006, 126(1), 120–142. [preprint]
Communication by an expert concerned about appearing to be well informed, part I—analysis of tractable example with focus on characterization of equilibrium, comparative statics, and multiple experts speaking sequentially.
The
Transition to Digital Television, with Jerome Adda, Economic Policy, January
2005, 41, 160–209. [pre-panel draft, presentation slides]
Conceptual and empirical framework for evaluating policies for the
transition from analogue to digital television.
Price Competition for an
Informed Buyer, with Giuseppe Moscarini, Journal
of Economic Theory, December 2001, 101(2), 457–493.
Analysis of competition for a buyer with private information on the
relative quality of the sellers, with a Hotelling
reinterpretation and comparative statics with respect to buyer’s private
information and public information.
The
Value of Public Information in Monopoly, with Andrea Prat, Econometrica,
November 2001, 69(6), 1673–1683. [earlier draft with additional examples]
When does a
price-discriminating monopolist want to reveal public information to its
buyers? The linkage principle meets mechanism design by an informed principal.
Information Aggregation in
Debate: Who Should Speak First?, with Peter Sørensen, Journal
of Public Economics, September 2001, 81(3), 393–421.
Dynamics of
group think in a committee with members concerned about their reputation for
expertise, with implications for the organization of debate.
Herd
Behavior and Investment: Comment, with Peter Sørensen, American
Economic Review, June 2000, 90(3), 695–704.
Paper (i)
uncovers the close connection between reputational and statistical herding and
(ii) shows that reputational cascades also result when better informed agents
do not have access to signals that
are more positively correlated conditional on the state.
Social Learning in a Changing
World, with Giuseppe
Moscarini and Lones Smith, Economic Theory, 1998, 11(3),
657–665.
Only temporary informational
cascades can arise if the state of the world is changing stochastically over
time during the learning process.
Older
Working Papers
Contracts and Competition in the Pay-TV Market, with David Harbord
How is
downstream competition affected by the contractual terms used to sell essential
inputs to competitors?
Analysis of
issues relevant for regulation of independent financial advisers: communication
to unsophisticated audience, information acquisition by advisers, uncertainty
about the conflict of interest, and optimal incentive design.
Other Publications
The Favorite-Longshot Bias: An Overview of the Main
Explanations, with Peter Norman Sørensen, forthcoming in Handbook of Investments, Volume 6: Efficiency of Sports and Lottery
Betting Markets, edited by William T. Ziemba and Donald B Hausch.
Switching to Digital
Television: Business and Public Policy Issues, with Norbert Maier, in Standard and Public Policy, edited by
Victor Stango and Shane Greenstein, Cambridge
University Press, 2006, 345-371.
Anti-Competitive Contracts
in the UK Pay-TV Market, with David Harbord, European Competition Law Review, March
2002, 23(3), 122-126.
Economic Models of Social
Learning, with Giuseppe
Moscarini, Chapter 11 in "Decisions, Games and Markets", edited
by Pierpaolo Battigalli, Aldo Montesano and Fausto Panunzi, Kluwer Academic
Publishers, 1997, 265-298.
Teaching Cases
Cross Border Electricity
Trading and Market Design: The England-France
Interconnector, with Roman
Inderst [email
me to receive the Teaching Note]
Overture and Google:
Internet Advertising Pay-Per-Click Auctions, with Andrew Ellam
Policy Reports
Microeconomic Assessment of
the Home Buying Offer and Contract Process, with Roman
Inderst
http://www.london.edu/contact/gettingtotheschool.html
Assistant: Harvinder Saran, tel. +44 (0)20 7000 8425,
room P325