Essays on economic theory

Open Access
- Author:
- Higashi, Kazuyuki
- Graduate Program:
- Economics
- Degree:
- Doctor of Philosophy
- Document Type:
- Dissertation
- Date of Defense:
- October 17, 2024
- Committee Members:
- Barry Ickes, Program Head/Chair
Chloe Tergiman, Outside Unit & Field Member
Yuhta Ishii, Major Field Member
Nima Haghpanah, Chair & Dissertation Advisor
Nageeb Ali, Major Field Member - Keywords:
- Economic theory
- Abstract:
- This thesis consists of three chapters. The first chapter is a joint work with Kenjiro Asami. We study a long-term principal-agent problem involving experimentation with hidden actions. The principal delegates a costly experiment on the quality of the project to the agent. Since the agent is financially constrained in exerting effort, they require monetary transfers before exerting effort each time. The agent can privately divert these funds for personal use. When news arrives, the agent has the option to conceal the news’ arrival to continue receiving monetary transfers without exerting effort. The principal designs a time-dependent bonus to incentivize the agent to report the news. We show that a contract encouraging immediate reporting is more profitable than one that allows for delayed reporting. In the second chapter, I consider a Bayesian persuasion problem with hidden action. When the principal can decide on both information structure and monetary transfer, which relies on the stochastic output, then full separation or full pooling contract is optimal. In the third chapter, I study a sender-receiver game in which the sender has two kinds of private information. One is the payoff-relevant state, and the other is evidence. The sender can communicate by revealing evidence. The sender can manipulate evidence downwards not upwards. I show that all equilibria have a cutoff structure and characterize these cutoffs. These cutoffs need not be aligned, that is, two types with the same state might send different messages even though both messages are available to both types. My main result is that the cutoffs are aligned if the equilibrium is monotone, that is, higher messages lead to higher actions. Depending on the bias, there might be three types of equilibria: pooling, full disclosure, and those in which low-state senders conceal evidence.