Essays on incommplete information in markets
- Autores: Anna Bayona Font
- Directores de la Tesis: Xavier Vives (dir. tes.)
- Lectura: En la Universidad de Navarra ( España ) en 2014
- Idioma: español
- Tribunal Calificador de la Tesis: Bruno Cassiman (presid.), Manuel Mueller-Frank (secret.), Margaret R. Meyer (voc.), José Apesteguia (voc.), Rosemarie Nagel (voc.)
- Materias:
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- Resumen
This thesis examines the impact of incomplete information in markets. I study markets whose participants make choices under uncertainty and whose actions are strategically interdependent, in contexts where public information aggregates dispersed information. In the first chapter, I analyse theoretically the equilibrium and efficiency properties of markets where public information is endogenous. I find that the endogenous public signal causes an information externality, which makes agents underweight private information in a larger payoff parameter region in comparison to exogenous public information. I answer under what conditions and in which markets more precise public and private information are beneficial. In the second chapter, we design an experiment to investigate competition in supply functions. Our design has two treatments: uncorrelated and positively correlated costs. We confirm some predictions of the theoretical model of Vives (2011), such as that behaviour in the uncorrelated values treatment is close to the theoretical prediction. We find evidence that some subjects in the positively correlated values treatment ignore the correlation amongst costs, which is consistent with the literature of the winner¿s curse. We provide a deeper behavioural explanation our results, using the level-k model of strategic thinking and best response analysis. In the third chapter, I explore theoretically competition in supply functions with boundedly rational and sophisticated agents. Boundedly rational agents do not fully understand the strategic information environment and may have biased beliefs about the beliefs of their rivals. I explore three types of markets: equilibrium behaviour in symmetric models with boundedly rational agents, asymmetric behaviour in non-equilibrium models, and equilibrium behaviour in markets with both fully rational and boundedly rational agents. I find that the competitiveness of a market depends on the market structure, informational frictions, proportion and type of boundedly rational agents, symmetry of allocations, and the strategic incentives of those agents who are sophisticated.
