Essays in information economics

Georgiadis-Harris, Alkiviadis (2022) Essays in information economics. PhD thesis, London School of Economics and Political Science.

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Abstract

The first chapter analyzes a dynamic model of information acquisition by a Bayesian decisionmaker. In the model the decision-maker has full flexibility in choosing the fine qualitative features of the information they acquire, but faces a constraint on the ‘per-period’ quantity of information they can generate. Moreover, the decision-maker lacks control over the timing of their actions. At the optimum, the decision maker concentrates resources in generating a single piece of breakthrough news, contradicting their plan of action. In the absence of such news, the decision maker becomes more confident in their intentions. This leads them to sacrifice the frequency with which breakthroughs arrive in order to increase their impact on choice behaviour. The second chapter (with T. Brzustowski, and B. Szentes), reconsiders the problem of a durablegood monopolist who cannot make intertemporal commitments. The buyer’s valuation is binary and his private information. The seller has access to dynamic contracts and, in each period, decides whether deploy the previous period’s contract or to replace it with a new one. Our main result is that the Coase Conjecture fails: the monopolist’s payoff is bounded away from the low valuation irrespective of the discount factor. Finally, the third chapter (with M. Guennewig) examines the efficacy of bail-ins in resolving the regulator’s problem of committing not to conduct bail-outs. By endogenizing financing choices in a market which internalises the presence of the regulator, we find that debt maturity shortens. Creditors then respond to news on bank fundamentals leading to runs on loss-absorbing debt, which render bail-ins ineffective. The model provides an explanation why regulators impose minimum maturity requirements for bail-in debt and a motivation to treat short-term debt preferentially during intervention, which achieve constrained efficiency in our model.

Item Type:	Thesis (PhD)
Additional Information:	© 2022 Alkiviadis Georgiadis-Harris
Library of Congress subject classification:	H Social Sciences > HB Economic Theory Q Science > QA Mathematics
Sets:	Departments > Economics
Supervisor:	Szentes, Balázs
URI:	http://etheses.lse.ac.uk/id/eprint/4446

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