Moreno de Barreda, Ines
(2011)
Essays in applied economic theory.
PhD thesis, London School of Economics and Political Science.
Abstract
This thesis consists of three essays, all of which use the tools of economic theory to
analyze specific situations in which multiple strategic agents interact with each other.
The first chapter studies the strategic transmission of information between an
informed expert and a decision maker when the latter has access to imperfect private
information relevant to the decision. The main insight of the paper is that the access
to private information of the decision maker hampers the incentives of the expert to
communicate. Surprisingly, in a wide range of environments, the decision maker's
information cannot make up for the loss of communication and the welfare of both
agents diminishes.
The second chapter presents a model of electoral competition between an in-
cumbent and a challenger in which the voters receive more information about the
quality of the incumbent. If the incumbent can manipulate the information received
by the voters through costly effort, the model predicts an incumbency advantage,
even though the two candidates are drawn from identical symmetric distributions,
and the voters have rational expectations. It is also shown that a supermajority
re-election rule improves welfare, mainly through discouraging low-quality politicians
from manipulating the information.
Finally the third chapter uses a mechanism design approach to characterize the
class of social choice functions which cannot be profitably manipulated, when the
individuals have symmetric single-peaked preferences. Our result allows for the design
of social choice functions to deal with feasibility constraints.
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