arXiv subjects

Jacopo Bizzotto

Publications and source records attributed to Jacopo Bizzotto.

3 recordsLinked to original sources

arXiv2025

Simple Communication

We study multidimensional cheap talk with simple language and aligned preferences. An expert communicates with a decision-maker using a score that aggregates a multidimensional state into a one-dimensional message. Even though the expert and the decision-maker share the same payoffs, the use of simple language introduces strategic frictions. Under quadratic-loss utility, any equilibrium score must be linear in the state or a coarsening of a linear score. As a result, equilibrium payoffs are lower than those achievable under commitment to a score. Finally, for normally distributed states, we characterize the equilibrium linear scores and show they correspond to the ex-ante best and worst linear scores.

econ.TH↗

arXiv2024

Sorting and Grading

We propose a framework to assess how to optimally sort and grade students of heterogenous ability. Potential employers face uncertainty regarding an individual's productive value. Knowing which school an individual went to is useful for two reasons: firstly, average student ability may differ across schools; secondly, different schools may use different grading rules and thus provide varying incentives to exert effort. An optimal school system exhibits coarse stratification with respect to ability, and more lenient grading at the top-tier schools than at the bottom-tier schools. Our paper contributes to the ongoing policy debate on tracking in secondary schools.

econ.TH↗

arXiv2022

The Limits of Limited Commitment

We study limited strategic leadership. A collection of subsets covering the leader's action space determines her commitment opportunities. We characterize the outcomes resulting from all possible commitment structures of this kind. If the commitment structure is an interval partition, then the leader's payoff is bounded by her Stackelberg and Cournot payoffs. Under general commitment structures the leader may obtain a payoff that is less than her lowest Cournot payoff. We apply our results to a textbook duopoly model and elicit the commitment structures leading to consumer- and producer-optimal outcomes.

econ.TH↗