arXiv subjects

Mehmet Ekmekci

Publications and source records attributed to Mehmet Ekmekci.

4 recordsLinked to original sources

arXiv2025

Turning the Ratchet: Dynamic Screening with Multiple Agents

We study a dynamic contracting problem with multiple agents and limited commitment. A principal seeks to screen efficient agents using one-period contracts, but is tempted to revise contract terms upon knowing an agent's type. Alterations of contracts are observable and, hence, whenever past promises are broken future information revelation stops. We provide necessary and sufficient conditions under which information revelation can be fostered. For sufficiently patient players, private information is either never revealed or fully revealed in a sequential manner. Optimal contracts provide high-powered incentives upon initial disclosure of an agent's type, and rewards for information revelation vanish over time.

econ.TH↗

arXiv2021

Learning from Manipulable Signals

We study a dynamic stopping game between a principal and an agent. The agent is privately informed about his type. The principal learns about the agent's type from a noisy performance measure, which can be manipulated by the agent via a costly and hidden action. We fully characterize the unique Markov equilibrium of this game. We find that terminations/market crashes are often preceded by a spike in (expected) performance. Our model also predicts that, due to endogenous signal manipulation, too much transparency can inhibit learning. As the players get arbitrarily patient, the principal elicits no useful information from the observed signal.

econ.TH↗

arXiv2021

Reputational Bargaining with Ultimatum Opportunities

We study two-sided reputational bargaining with opportunities to issue an ultimatum -- threats to force dispute resolution. Each player is either a justified type, who never concedes and issues an ultimatum whenever an opportunity arrives, or an unjustified type, who can concede, wait, or bluff with an ultimatum. In equilibrium, the presence of ultimatum opportunities can harm or benefit a player by decelerating or accelerating reputation building. When only one player can issue an ultimatum, equilibrium play is unique. The hazard rate of dispute resolution is discontinuous and piecewise monotonic in time. As the probabilities of being justified vanish, agreement is immediate and efficient, and if the set of justifiable demands is rich, payoffs modify Abreu and Gul (2000), with the discount rate replaced by the ultimatum opportunity arrival rate if the former is smaller. When both players' ultimatum opportunities arrive sufficiently fast, there may exist multiple equilibria in which their reputations do not build up and negotiation lasts forever.

econ.TH↗

arXiv2021

Cross-verification and Persuasive Cheap Talk

We study a cheap-talk game where two experts first choose what information to acquire and then offer advice to a decision-maker whose actions affect the welfare of all. The experts cannot commit to reporting strategies. Yet, we show that the decision-maker's ability to cross-verify the experts' advice acts as a commitment device for the experts. We prove the existence of an equilibrium, where an expert's equilibrium payoff is equal to what he would obtain if he could commit to truthfully revealing his information.

econ.TH↗