Abstracts Communications and the Arts

Essays in information economics

by Aidan Luke Robert Smith

This thesis collects three papers which study settings of imperfect information transmission. In "Strategic Information Release on a Communication Network", we study the problem of a sender who seeds a network with information, knowing that as the information spreads, it will acquire noise due to the 'broken telephone' effect. In "Noisy Disclosure", we also study communication via a noisy channel, and analyse the disclosure problem of a sender who can send a verifiable message about the state of the world, which may be corrupted by noise before reaching a receiver. In "Reputational Incentives with Networked Customers", we study networked learning for customers in a setting in which customers can observe only the reviews written by their neighbours on a network, and a firm can engage in non-contractible effort when serving customers to increase the probability of good reviews. In the first two papers, we show that a sender looking to influence the behaviour of decision makers can attempt to overcome noise in transmission by seeding the most central receiver on a network, or by failing to disclose their private information with positive probability. In the final paper, we show that restricting the ability of customers to observe only their neighbours' reviews may be welfare improving, if doing so means a firm must exert more effort to build a good reputation. Our results have important implications for consumer welfare: for example; mandatory disclosure policies for firms may be harmful if communication is noisy, while making it easier for customers to access a firm's past reviews may mean a firm with a good reputation does not exert as much effort for customers.