Questions tagged [information]

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Any good resources on Information Economics Theory?

I am coming from a political economy/public choice perspective, trying to explore some ideas in signaling, especially the supply-side analysis of information transmission by the media/news. Although I ...
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2 votes
1 answer
162 views

Bayes’ rule in "The sources of capital misallocation"

I am reading a paper titled "The sources of capital misallocation". In the model, firms are facing incomplete information about their future productivities. In particular, the productivity ...
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0 votes
0 answers
27 views

Why do users post information and their opinions on micro-blogging platforms?

I am working on a research paper in which I will investigate the impact of social media and micro-blogging platforms on the financial market. With regard to the theoretical foundations, I would like ...
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3 votes
1 answer
109 views

What is the intuition behind Blackwell's Equivalence Theorem on Information Structures?

Let us suppose that we have a Bayesian game where the information structure is defined to be as $P^X=\{(X,\mathcal{X},P_\theta)\}_{\theta\in\Theta}$ where a signal generated by the information ...
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0 votes
0 answers
43 views

Alternative to Investing.com

Do you know of any alternative to Investing.com that allows me to get historical data by editing the URL? What I mean is that in Investing.com in the historical data page I get the form data retrieved ...
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0 votes
0 answers
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How does this definition change when we introduce some kind of information?

In Heller et al, they use the Osborne and Rubinstein formal definition for the extensive form games with public information. However, the model can work with the same definitions in case all players ...
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2 votes
0 answers
21 views

Social learning and diffusion

I'm looking at the literature on information dissemination within networks and came across the concept of diffusion of information in Alatas et al.,2016. The way I understood is diffusion refers to ...
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Information acquisition problem and desing of information

I am searching some details about the information acquisition problem. I want to understand what this is about and where can I find the beginning of this literature. I think this problem is some kind ...
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1 vote
1 answer
88 views

Mechanisms of communication in game theory

In the spirit of the previous question that I have done, here considering the paper here I am trying to make the matching definition $2.2$ here. I will give two definitions and I would like to clarify ...
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  • 448
3 votes
1 answer
147 views

Difficulty in understanding the notation related from probability theory with game theory

The question that I have is a little technical and it has to do with the notation and the combination between some mathamatical properties in the probability theory of information economics. Say $\...
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  • 448
2 votes
0 answers
32 views

Strategy definition in an extensive form game

How a (pure ) strategy is defined in an extension form game with information sets? I would like to have both an intuitive and a formal definition. Thank you in advance!
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  • 448
3 votes
1 answer
71 views

VCG mechanism and budget balance

I have a general question on how we state that in VCG (which doesn't balance the budget) we can't distribute the money as it will destroy incentives. I don't understand how for ex. this would affect ...
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4 votes
2 answers
119 views

Olivier Gossner - Secure Protocols or How Communication Generates Correlation

The paper of Olivier Gossner in Security Protocols in 1998 has some definitions that confuse me too much. I will cite here these definitions and my questions and I hope someone is familiar with these ...
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6 votes
1 answer
123 views

Definition of Diffusion Centrality in Banerjee et al. (2019)

I am reading "Using gossips to spread information: Theory and evidence from two Randomised Control Trials" by Banerjee, Chandrashekhar, Duflo and Jackson, where they discuss the efficacy of ...
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1 vote
0 answers
43 views

Payoffs in games with imperfect information can be different?

I know that a game has imperfect information if there is an nonsingleton information set, and that defines a situation on which a player can't distinguish between the nodes in the information set. ...
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4 votes
3 answers
147 views

Definiton of information sets in rational expecations models

I am struggling with the notion of 'information sets' in the context of rational expectation models in economics. I found interesting notes on the web (http://www2.econ.iastate.edu/tesfatsi/reintro....
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2 votes
1 answer
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Why is a solution concept of Bayesian Persuasion a subgame perfect equilibrium?

Many papers on Bayesian persuasion adopt SPE as a solution, by arguing that the sender has no private information. This does not make sense to me: Regardless of whether the sender has private ...
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1 vote
1 answer
20 views

SIR Model and Information/ Innovation Economics

The SIR Model from epidemiology is being discussed a lot recently due to the COVID19 scenario. I recently read this article about the Corona virus and what economics can offer- https://afinetheorem....
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1 vote
1 answer
107 views

Premises on which the Efficient Market Hypothesis is built upon

The Efficient Market Hypothesis tells us that stocks are "fairly priced" (i.e. not systematically over- or under-valued). That is, stock prices reflect all information that is already known about them....
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23 votes
9 answers
7k views

What are examples for the phenomenon that more (or better) information makes everybody worse off?

More information is usually considered "better". Let's say a rational agent chooses optimally given his information on the circumstances of a particular decision problem. Then providing him with more ...
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1 vote
1 answer
117 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{...
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5 votes
2 answers
111 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 ...
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0 votes
2 answers
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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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0 votes
2 answers
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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 ...
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0 votes
1 answer
133 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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2 votes
0 answers
34 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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0 votes
0 answers
23 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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3 votes
1 answer
360 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 "...
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7 votes
1 answer
112 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 ...
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3 votes
1 answer
405 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 ...
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1 vote
2 answers
2k 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 $\bar{u}$....
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0 votes
1 answer
38 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)/...
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4 votes
1 answer
63 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 ...
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6 votes
1 answer
84 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 ...
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0 votes
1 answer
42 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. ...
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6 votes
2 answers
260 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 ...
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6 votes
1 answer
99 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 ...
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  • 2,559
5 votes
1 answer
203 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 ...
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3 votes
1 answer
83 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 ...
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2 votes
1 answer
43 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 ...
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2 votes
0 answers
35 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} \...
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3 votes
2 answers
176 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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1 vote
2 answers
421 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?
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6 votes
2 answers
61 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 ...
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  • 9,127
5 votes
1 answer
73 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 ...
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  • 191
2 votes
2 answers
76 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 ...
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5 votes
4 answers
769 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 ...
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  • 2,167
8 votes
3 answers
729 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 ...
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