Search

We provide the first theoretical analysis of altruism in networks. Agents are embedded in a fixed, weighted network and care about their direct friends. Given some initial distribution of incomes, they may decide to support their poorer friends. We study the resulting non-cooperative transfer game. Our analysis highlights the importance of indirect gifts, where an agent gives to a friend because his friend himself has a friend in need. We uncover four main features of this interdependence. First, we show that there is a unique profile of incomes after transfers, for any network and any utility functions. Uniqueness in transfers holds on trees, but not on arbitrary networks. Second, there is no waste in transfers in equilibrium. In particular, transfers flow through indirect paths of highest altruistic strength. Third, a negative shock on one agent cannot benefit others and tends to affect socially closer agents first. In addition, an income redistribution that decreases inequality ex-ante can increase inequality ex-post. Fourth, altruistic networks decrease income inequality. In contrast, more altruistic or more homophilous networks can increase inequality.

Some recent information transmission models (Kamenica and Gentzkow 2011; Rayo and Segal 2010) view the sender as an information structure designer. This view emphasizes a connection between design and information transmission. It departs from traditional models of information transmission (Crawford and Sobel 1982; Grossman 1981; Milgrom 1981; Spence 1973) since it assumes that the sender commits to an information system before learning her type so that her choice is by itself uninformative. By contrast, there is a small but active tradition in mechanism design (following Myerson 1983) that considers the possibility that a choice of mechanism by an informed principal may be used as a signal by the participants in the mechanism. Through the study of an example, this short paper proposes a modest first step toward building a theory of information structure design by an informed principal. I work in a simple framework where a sender, whose type is either high or low, seeks validation from a receiver who wants to validate high types exclusively. The sender chooses an infor mation system (i.e., a conditional distribution of signals for each of her types) from a feasible set. I allow for potential restrictions on the set of feasible information systems, which is important to make Bayesian persuasion models more flexible. I consider perfect Bayesian equilibria of the game in which the sender chooses an information system after learning her type, and the receiver chooses whether to validate after observing the signal generated by the information system.

This note offers characterizations of tightness and weak tightness. It shows that when the preference domain is that of continuous utility functions on the outcome space, the two notions are equivalent to the outcome closure property of Milgrom (2010a).

This article asks when communication with certifiable information leads to complete information revelation. We consider Bayesian games augmented by a pre-play communication phase in which announcements are made publicly. We first characterize the augmented games in which there exists a fully revealing sequential equilibrium with extremal beliefs (i.e., any deviation is attributed to a single type of the deviator). Next, we define a class of games for which existence of a fully revealing equilibrium is equivalent to a richness property of the evidence structure. This characterization enables us to provide different sets of sufficient conditions for full information disclosure that encompass and extend all known results in the literature, and are easily applicable. We use these conditions to obtain new insights in games with strategic complementarities, voting with deliberation, and persuasion games with multidimensional types.

This paper addresses a common criticism of certi fication processes: that they simultaneously generate excessive complexity, insufficient scrutiny and high rates of undue validation. We build a model of persuasion in which low and high types pool on their choice of complexity. A natural criterion based on forward induction selects the high-type optimal pooling equilibrium. More complexity always leads to lower scrutiny by the receiver because it makes understanding marginally more costly. When the receiver is biased towards rejection, more complexity also makes the receiver more selective, and the sender simplifies her report in equilibrium. When the receiver is biased towards validation, however, more complexity makes the receiver less selective, and we provide sufficient conditions that lead to complexity inflation in equilibrium.

This paper studies selection rules i.e. the procedures committees use to choose whether to place an issue on their agenda. The main ingredient of the model is that committee members are uncertain about their final preferences at the selection stage: they only know the probability that they will eventually prefer the proposal to the status quo at the decision stage. This probability is private information. We find that a more stringent selection rule makes the voters more conservative. Hence individual behavior reinforces the effect of the rule instead of balancing it. For a voter, conditional on being pivotal, the probability that the proposal is adopted depends on which option she eventually favors. The probability that the proposal is adopted if she eventually prefers the proposal increases at a higher rate with the selection rule than if she eventually prefers the status quo. In order to compensate for that, the voters become more selective. The decision rule has the opposite effect. We describe optimal rules when there is a fixed cost of organizing the final election., Cet article étudie les règles de sélection d'ordre du jour, i.e. aux procédures utilisées dans tout comité pour décider de discuter d'un sujet donné afin, éventuellement, de changer la politique du comité relative à ce sujet. L'ingrédient principal du modèle est que les membres d'un comité ont une information imparfaite sur leurs préférences lors de l'établissement de l'ordre du jour : ils ne connaissent que leur probabilité de préférer la nouvelle politique proposée lors de la discussion d'un sujet donné, au statu quo. Cette probabilité est une information privée. Nous démontrons que plus la règle de sélection est stricte, plus les membres du comité sont conservateurs ; le comportement individuel renforce donc l'effet de la règle. Pour un électeur, conditionnellement au fait d'être pivot, la probabilité que la nouvelle politique soit adoptée dépend de son option préférée. La probabilité que cette nouvelle politique soit adoptée s'il la préfère au statu quo augmente plus rapidement avec la règle de sélection que la probabilité que cette nouvelle politique soit adoptée s'il préfère le statu quo. Afin de compenser cet effet, les électeurs deviennent plus sélectifs. La règle de décision a l'effet inverse. Nous déterminons les règles optimales lorsqu'il y a un coût fixe à l'organisation d'élections.