"Helpful laymen in informational cascades," Journal of Economic Behavior and Organization, August 2015, volume 116, pages 407-415
Abstract: This paper extends Bikhchandani, Hirshleifer and Welch’s informational cascade model by introducing two types of players: experts with high signal accuracy and laymen with low signal accuracy. If a small enough fraction of laymen are present in the population, the probability of having a correct cascade is strictly higher than if no laymen are present. This is because the presence of laymen makes experts less eager to follow suit, which increases the amount of private information revealed.
"Non-competing persuaders," July 2019
Abstract: I study Bayesian persuasion games with multiple persuaders in which the persuaders are non-competing: all persuaders want the decision maker to take the same action, regardless of the state. In the case of a single persuader, it is known from previous research that the persuader-optimal information design leaves the decision maker with no surplus. In this paper, I show that with two or more non-competing persuaders and independent tests, there are always equilibria in which the decision maker receives surplus. Moreover, if there is exogenous noise then the decision maker receives surplus in every equilibrium, provided the number of persuaders is sufficiently large; asymptotically, the decision maker learns the true state in every Pareto optimal symmetric equilibrium with infinitely many persuaders. Moreover, with sufficient exogenous noise, having more than one persuader not only improves the welfare of the decision maker but it also improves the welfare of the persuaders.
Abstract: When advancements in data analytics enable digital media to provide personalized news for readers, will they provide news that conforms to the readers' exisiting biases, thus creating "echo chambers"? To answer this question, this paper studies a game between a click-maximizing website and a reader who tries to learn the true state of the world. Contrary to popular belief, this paper shows that the answer is "no". It is, in fact, optimal for the website to feature headlines that contradict the reader's exisiting bias. This result is jointly driven by the reader's demand for learning and the website's strategy to induce clicks. On the one hand, the reader expects to learn more about the state of the world when she reads an article that contradicts her current views, even if she expects it to be less credible than an article which agrees with her views. On the other hand, by featuring surprising headlines, the website challenges the reader's belief about the true state and increases her demand to click for more information. This paper stands in contrast with papers by Gentzkow and Shapiro (2006) as well as Suen (2004), which rationalize how subscription-maximizing media such as newspapers and cable TVs pander to consumers' prior biases with conforming news.