|Institution:||University of Pittsburgh|
|Full text PDF:||http://d-scholarship.pitt.edu/29194/1/Dissertation_Ling_Yang_1.pdf|
This dissertation comprises three essays on information economics. I study the role of information in various decision making environments. In the first chapter, I propose an alternative way to study the value of information in a game. A decision problem is similar to another if the optimal decision rule for the latter, when applied to the former, is better than making a decision without any information in the former. In a game, if the induced decision problem by a change in the strategies of other players is similar to the problem originally faced by the player, the player benefits more from her own information after the change. Using the concept of similarity, I study the value of information in various games, even when a closed form solution is unavailable. The second chapter studies a persuasion game between a decision maker (DM) and an expert. Prior to the communication stage, the expert exerts costly effort to obtain decisive information about the state of nature. The expert may feign ignorance but cannot misreport. We show that monitoring of information acquisition hampers the expert's incentives to acquire information. Contrary to everyday experiences, monitoring is always suboptimal if the expert's bias is large, yet sometimes optimal if the expert's bias is small. The third chapter studies a model in which partisan voting is rationalized by Knightian decision theory under uncertainty (Bewley, 2002). When uncertainty is large, some voters become hard-core supporters of their current party due to status quo bias. I characterize equilibria of the model that are robust to electorate size. With costly information acquisition, partisan behaviors arise naturally from status quo biases in large elections. In the selected informative voting equilibrium, swing voters rationally mix between two alternatives: either they acquire information and vote informatively or they do not acquire information and vote to cancel the partisans' votes.