A historical age is often named after its most salient resource. In our current age, that resource is information. Information has impacted economics in transformative ways, from a shift toward services to competition with outsourcing and automation. Technologies like mass and social media have made us more efficient and knowledgeable but also susceptible to untruths.
My dissertation explores the effects of misinformation (inaccurate) and disinformation (intentionally false) on collective choice, namely that they reduce expected welfare. I assume the role of a benevolent social planner and design mechanisms that improve this welfare, given that untruths occur. Then, because information closely relates to perception, I share a fresh approach on understanding and appreciating a well-known principle.
In Chapter 1 (Delayed Information Improves Cascades), I consider how the Internet enables information—be it true, inaccurate, or intentionally false—to cascade instantly and globally. I design a mechanism to mitigate wrong cascades by limiting the first k, of n, players to observe their own signal but not the signal or even action of previous players. I show that instant information (k = 0) performs strictly better than no information (k = n) but that delayed information (0 < k < n) performs best at an optimal k*(n,p), where p is signal accuracy. This suggests that polling and review websites can improve welfare by reaching a minimum number of ratings before releasing aggregate results.
In Chapter 2 (Pretending Volunteers), I introduce the ability to pretend in the volunteer's dilemma. Pretending contributes nothing, but it costs less than helping and confers honor if the public good is provided and shame otherwise. The main result is that the ability to pretend weakly reduces provision chance. High values of honor increase provision, especially when coupled with high shame. In the long run, pretenders dilute the honor from helping and discourage actual helpers. Authenticated help at a premium can remedy this. Extensions on sophistication and asymmetry explain why helpers, bystanders, and pretenders coexist.
In Chapter 3 (Visualization of Revenue Equivalence), I construct three-dimensional visualizations of revenue equivalence between first-price, second-price, and all-pay sealed-bid auctions for two bidders with uniformly-distributed private values. The mean height of each solid represents expected revenue and is equal across all three formats. I then present a summation approach using partitioned volumes. As the increments shrink toward zero, the three expected revenues converge to the continuous limit. Lastly, I share a tangible, ham-and-cheese model as example of a pedagogical tool.
|Advisor:||Bergstrom, Theodore C|
|Commitee:||Charness, Gary B, Kuhn, Peter J|
|School:||University of California, Santa Barbara|
|School Location:||United States -- California|
|Source:||DAI-A 81/8(E), Dissertation Abstracts International|
|Subjects:||Economic theory, Operations research, Cultural anthropology|
|Keywords:||Auctions, Cascade, Information, Media, Pretense, Public goods|
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