Questions tagged [information]
The information tag has no usage guidance.
29
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1answer
48 views
Set of Bayes Correlated Equilibria when complete information is not available
Model
Consider a game where a decision maker (DM) has to choose action $y\in \mathcal{Y}$ possibly without being fully aware of the state of the world.
The state of the world has support $\mathcal{...
6
votes
2answers
64 views
Why is infinite recursion on the common knowledge assumption necessary?
If something is common knowledge in a game, that means that every player knows it, and every player knows that every player knows it, and so on. Are there cases where only one such level of knowing ...
0
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1answer
28 views
How to interpret the intersected information partition element of different actors?
In this paper, it said that given $\omega$ is the current state of the world and $P_1(\omega)$ is the unique element from the information partition $\textit{P_1}$ of actor 1 in which the player 1 is ...
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2answers
54 views
Do all prices just reflect absence of information?
In information economics, information has economic value because it allows an agent to make better decisions. For example if an agent needs to buy some good, he will benefit from knowing about the ...
0
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1answer
38 views
How to find change in the optimal choice with a utility function in general form?
Suppose the utility function is represented as $U(x_1,x_2;I)$, where $I$ is the level of information the consumer possesses.
How to find the change in the optimal choice of $x_1$ as price of $x_1$ ...
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0answers
33 views
How far must one reason up the belief hierarchy?
In games of imperfect information, one must reason about the belief on the state of nature, the beliefs of other player's beliefs of their beliefs, and so on. This is referred to as the belief ...
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0answers
18 views
List of countries moved to developed economies in the last 50 years
I read in Bloomberg that five countries moved to advanced economies in the last 50 years from developing economies and one of them was Singapore. Wondering what are the other four countries?
The ...
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0answers
25 views
Fama's Definition of Market Efficiency
I'm reading Fama's Nobel lecture "Two Pillars in Asset Pricing" and I'm a little confused by his mathematical definition of market efficiency. Here it is below:
Suppose time is discrete, and $P_{t+...
3
votes
1answer
90 views
Why is it called Bayesian Persuasion?
I'm sure most of you are familiar with the paper titled "Bayesian Persuasion" by Kamenica and Gentzkow (2011), (you can find it here).
I was wondering what are your thoughts as to why it is called "...
7
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1answer
97 views
Robust asymmetric information?
Bergeman and Morris (2014) explain how the concept of Bayesian Correlated equilibrium contains all the robust predictions in games of incomplete information. In particular, their question is what are ...
2
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1answer
107 views
Insurance and Hirshleifer effect
I am trying to understand the statmement that 'public information kills insurance opportunity' -- referred to as Hirshleifer effect. Does it (in general) lead to some undesirable outcomes? Could you ...
1
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2answers
663 views
Why does the incentive compatibility constraint bind (moral hazard)?
Consider a very basic model of moral hazard with two possible effort levels $e_L<e_H$ and two possible levels of output $y_L<y_H$. If the agent doesn't participate, they get utility of $\bar{u}$....
0
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1answer
37 views
Is there any reliable data on what % of the UK population currently earn less than £17,300 annually?
According to the Living Wage Foundation the "real living wage" in the UK is £9 an hour
Which assuming a 37 hour week & rounding to the nearest whole GBP amounts to £17,375
Formula used ((9*37)/...
4
votes
1answer
55 views
Production choices in Hayek's theory of information-bearing prices
As I understand the work of Hayek, he asserts that prices encapsulate the true societal worth of the item being sold by integrating the compound need for all of the ingredients and work which go into ...
6
votes
1answer
69 views
Is a hyperlink a kind of informational public good?
Links analysis algorithms on the web take the incoming links to a webpage as a sign of its popularity. Given this, can we consider web hyperlinks, in aggregate, as a kind of public good? I am curious ...
0
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1answer
38 views
Formulas or rules regarding End of Life for vehicle
Are there formulas or rules when keeping a vehicle is no longer financially beneficial?
I understand the below needs to be considered:
Every time a purchase is made, sales tax will need to be paid.
...
7
votes
2answers
126 views
Does there exist a mathematical formalization of Hayek's ideas about information and the price system?
Hayek's idea, roughly, is that individuals in aggregate have distributed knowledge about their own utility functions and about specific supply-conditions, that no single individual can oversee, and ...
4
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0answers
48 views
Common knowledge in model formulation and solution
Economics models usually assume that the structure of the economy is common knowledge among agents.
Mathematically, an event is common knowledge if it lies in the meet of all agents' information ...
5
votes
1answer
112 views
Higher order beliefs and coherency in game theory
I am reading about the higher order beliefs. Before getting into the formal definitions, I will define some common terminology which I will need for the formal definitions.
If $X$ and $Y$ are two ...
3
votes
1answer
77 views
Why does optimal allocation call for unlimited distribution of information?
In his seminal paper Arrow (1962) states that information should be distributed without limit if an optimal allocation is to be achieved.
Quote (p. 614-615):
The cost of transmitting a given body ...
2
votes
1answer
41 views
Risk and Information
Does anyone know of some papers that look at how risk preferences affect demand for information (or related topics about the connection between risk and Information)? I took an information economics ...
2
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0answers
30 views
Is maximal utility conditional on information linear in convex combinations of priors?
This is related to a Mathematica question here - https://math.stackexchange.com/q/1952779/374929
Is a (maximal expected utility) function of the form
$U(\mu, X) \equiv \int_\Theta \int_\mathcal{X} \...
3
votes
2answers
159 views
Does the government have a role to play in certifying people's abilities for the labor market?
The nature of information often makes it look like a public good. Is this the case for certification of peoples abilities? Is there a role the government could play in certifying people's abilities? ...
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2answers
406 views
How does monopoly affect the informational role of price?
It is said in the textbook "Intermediate Microeconomics a Modern Approach" by Hal Varian that monopoly affects the informational role of price. What's the mechanism?
6
votes
2answers
58 views
Proof that the diff-in-diff (wrt sample size) of the expectation of a first-order statistic is positive (Stigler 1961)
I'm trying to prove a claim made in Stigler (1961), "The Economics of Information." This claim has to do with showing that the marginal benefit
of making an additional search (e.g., searching an ...
5
votes
1answer
68 views
Evidence that open source production processes increase efficiency and/or consumer surplus?
Is there peer reviewed evidence that open source production processes increase efficiency and/or consumer surplus? It seems that the first theorem of welfare economics requires complete markets which ...
2
votes
2answers
63 views
Effect of information on stock indices
The rules for including a stock in indices such as S&P 500 are common knowledge, so everyone can know when e.g. company B is going to enter the index instead of company A. Since ETFs and mutual ...
5
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4answers
649 views
The Backward Bending Supply Curve, Asymmetric Information, and Monopoly
This recent question about when monopoly is undesirable made me curious about when monopoly is actually desirable? I was reminded of an argument for the efficiency of monopolies when moral hazard ...
8
votes
3answers
473 views
What are some theoretical explanations for deviations from the efficient market hypothesis?
According (the semi-strong form of) the efficient market hypothesis, the price of an asset should reflect all publicly available information about the 'fundamental value' of that asset. The reasoning ...
