Browsing by Author "Pai, Mallesh"

Now showing 1 - 5 of 5
  • Thumbnail Image
    Item
    Essays in Strategic Communication and Matching Design
    (2022-08-11) Abasov, Maksat; Pai, Mallesh
    In this dissertation, I provide a game-theoretic analysis of three models of strategic communication and mechanism design. In Chapter 1, I analyze cheap talk communication under the receiver's uncertainty about the sender's expertise. I find that in a one-shot cheap-talk communication game, the informativeness of the sender's messages need not increase in the receiver's prior belief about the sender's expertise. Using this result, I further show that in a two-period repeated game, the sender's reputation concerns might force her to report less truthfully, thus making communication less efficient from the receiver's point of view. In Chapter 2, I consider the matching platform's problem of implementing an incentive compatible and individually rational matching mechanism. The players on two sides have their private types that determine their outside options and their value to their potential matches. The platform's problem is to (i) specify a matching function that depends on players' reports and (ii) a transfer function. For a general finite-player setting, I characterize implementable mechanisms. Using this characterization, I show that a random matching mechanism is always implementable. Using a constructive proof, I also show that implementability of positive assortative matching is possible but not guaranteed. In Chapter 3, I study a model of information sharing in which two firms have to take actions in an uncertain environment. They both have private signals and would benefit from learning each other's signals. Yet sharing the signal hurts each of them while increasing the overall efficiency. I find that introducing an intermediary who offers information-sharing contracts improves efficiency of communication. If firms have signals of similar precision then full sharing is possible using these contracts. If precision is unequal, then the less informed firm shares fully and the more informed firm shares its information partially.
  • Thumbnail Image
    Item
    Essays on Information Economics and Behavioral Economics
    (2024-04-18) Niu, Mingzi; Pai, Mallesh
    The thesis investigates the impact of informational and behavioral frictions on decision-making processes and examines potential remedies to mitigate these frictions. The first chapter, “Motivated Misspecification,” introduces a model of expectation management and investigates how the type of misperception is determined in a principal-agent framework. The principal controls the agent’s expectation of a project’s potential, and the agent exerts effort over time. An unrealistically high expectation stimulates effort in the short run but potentially backfires and lowers the agent’s effort in the long run. I characterize circumstances under which the principal makes the agent overly optimistic or pessimistic about the project. The key intuition is that, to sustain excessive effort, the principal should downplay factors that affect project output independent of the agent’s effort. Such manipulation inflates the agent’s perceived return to her effort. My work thus provides a novel approach to induce effort (perception manipulation), complementary to the usual monetary or informational incentives studied in the principal-agent theory. I apply my results to understand manipulation in a wide range of interactions, such as mentorship and abusive relationships. The second chapter, “Procrastination and Commitment,” proposes a tractable model of procrastination. A present-biased agent has a task to complete by a fixed deadline. I characterize the agent’s effort over time and study the interplay between present bias and task features. I then consider a natural remedy to procrastination on a long-term task, namely, committing to a series of short-term goals. I show that short-term goals weakly impair a present-biased agent’s welfare. This provides a cautionary counterpoint to the bulk of literature on time inconsistency, where commitment can strictly enhance welfare for present-biased agents. The third chapter, “Signaling Design,” is an ongoing collaborative work with Matteo Camboni, Mallesh Pai, and Rakesh Vohra. We revisit the classic job-market signaling model of Spence (1973), introducing profit-seeking schools as intermediaries that design the mapping from candidates’ efforts to job-market signals. Each school commits to an attendance fee and a signaling structure. We investigate how the market structure of schools affects signaling options available to the market.
  • Thumbnail Image
    Item
    Essays on the Economics of Communication and Disclosure
    (2020-07-16) Oliver, Atara S; Eraslan, Hulya; Pai, Mallesh; Ramesh, Krishnamoorthy
    Individuals convey information through the messages that they send, and—just as importantly—through the messages they do not send. In this dissertation, I focus on two important applications of communication—the publication decisions of the media and the disclosure decisions of job applicants. While these applications differ, in both cases the individuals carefully consider the implications of their messages, and may benefit from keeping silent. In my first chapter, I consider the effect of the 24-hour nature of internet news on the posting decisions of a media firm. To do so, I compare a scenario in which the news can be posted and updated at any time to a scenario in which news can only be posted at a fixed time. I determine the editorial standard, which is a cutoff that determines how certain a firm must be in order to initially post an article. If changing a story is costly, then the firm's editorial standard is weakly higher when it can post at any time, and it decreases over time. This implies that the internet may lead the firm to be more cautious. However, if the firm has a strong prior about the event, it may post earlier with less information when it can post on the internet at any time. In my second chapter, I consider recently implemented policies that prohibit employers from asking job applicants to reveal their current wages. This policy change makes wage disclosure a strategic choice for applicants. I consider a model in which an applicant applies for a job, and the employer can choose to make her an offer at a cost. I find that if an applicant does not initially know how much she will benefit from the job, then there can exist a partial disclosure equilibrium in which the applicant conceals her wage if it is low or high, but reveals intermediate wages. In any such equilibrium, no type of applicant is worse off than she would be under full disclosure, and some types of applicants are better off. The effect of this policy on the wage gap is ambiguous.
  • Thumbnail Image
    Item
    Fairness Incentives for Myopic Agents
    (ACM, 2017) Kannan, Sampath; Kearns, Michael; Morgenstern, Jamie; Pai, Mallesh; Roth, Aaron; Vohra, Rakesh; Wu, Zhiwei Steven
    We consider settings in which we wish to incentivize myopic agents (such as Airbnb landlords, who may emphasize short-term profits and property safety) to treat arriving clients fairly, in order to prevent overall discrimination against individuals or groups. We model such settings in both classical and contextual bandit models in which the myopic agents maximize rewards according to current empirical averages, but are also amenable to exogenous payments that may cause them to alter their choices. Our notion of fairness asks that more qualified individuals are never (probabilistically) preferred over less qualifie ones [8]. We investigate whether it is possible to design inexpensive subsidy or payment schemes for a principal to motivate myopic agents to play fairly in all or almost all rounds. When the principal has full information about the state of the myopic agents, we show it is possible to induce fair play on every round with a subsidy scheme of total cost o(T) (for the classic setting with k arms, ~{O}(\sqrtk3T), and for the d-dimensional linear contextual setting ~{O}(d\sqrtk3T)). If the principal has much more limited information (as might often be the case for an external regulator or watchdog), and only observes the number of rounds in which members from each of the k groups were selected, but not the empirical estimates maintained by the myopic agent, the design of such a scheme becomes more complex. We show both positive and negative results in the classic and linear bandit settings by upper and lower bounding the cost of fair subsidy schemes.
  • Thumbnail Image
    Item
    Strategy investments in zero-sum games
    (Springer Nature, 2024) Garcia, Raul; Hosseinian, Seyedmohammadhossein; Pai, Mallesh; Schaefer, Andrew J.
    We propose an extension of two-player zero-sum games, where one player may select available actions for themselves and the opponent, subject to a budget constraint. We present a mixed-integer linear programming (MILP) formulation for the problem, provide analytical results regarding its solution, and discuss applications in the security and advertising domains. Our computational experiments demonstrate that heuristic approaches, on average, yield suboptimal solutions with at least a 20% relative gap with those obtained by the MILP formulation.