arXiv subjects

Navin Kartik

Publications and source records attributed to Navin Kartik.

13 recordsLinked to original sources

arXiv2026

How Wasteful is Signaling?

Signaling is wasteful. But how wasteful? We study the fraction of surplus dissipated in a separating equilibrium. For isoelastic environments, this waste ratio has a simple formula: $\beta/(\beta+\sigma)$, where $\beta$ is the benefit elasticity (reward to higher perception) and $\sigma$ is the elasticity of higher types' relative cost advantage. The ratio is constant across types and is independent of other parameters, including convexity of cost in the signal. We show that the directional effects of $\beta$ and $\sigma$ on waste extend to non-isoelastic environments. In an application to signaling tournaments, more competitors or fewer prizes increase waste, with full dissipation in large tournaments.

econ.GN↗

arXiv2026

Multi-Sender Disclosure with Costs

We study voluntary disclosure with multiple biased senders who may bear costs for disclosing or concealing their private information. Under relevant assumptions, disclosures are strategic substitutes under a disclosure cost but complements under a concealment cost. Additional senders thus impede any sender's disclosure under a disclosure cost but promote it under a concealment cost. In the former case, a decision maker can be harmed by additional senders, even when senders have opposing interests. The effects under both kinds of message costs turn on how a sender, when concealing his information, expects others' messages to systematically sway the decision maker's belief.

econ.TH↗

arXiv2025

Replacement and Reputation

Does electoral replacement ensure that officeholders eventually act in voters' interests? We study a reputational model of accountability. Voters observe incumbents' performance and decide whether to replace them. Politicians may be "good" types who always exert effort or opportunists who may shirk. We find that good long-run outcomes are always attainable, though the mechanism and its robustness depend on economic conditions. In environments conducive to incentive provision, some equilibria feature sustained effort, yet others exhibit some long-run shirking. In the complementary case, opportunists are never fully disciplined, but selection dominates: every equilibrium eventually settles on a good politician, yielding permanent effort.

econ.TH↗

arXiv2024

Convex Choice

For multidimensional Euclidean type spaces, we study convex choice: from any choice set, the set of types that make the same choice is convex. We establish that, in a suitable sense, this property characterizes the sufficiency of local incentive constraints. Convex choice is also of interest more broadly. We tie convex choice to a notion of directional single-crossing differences (DSCD). For an expected-utility agent choosing among lotteries, DSCD implies that preferences are either one-dimensional or must take the affine form that has been tractable in multidimensional mechanism design.

econ.TH↗

arXiv2024

Information Revelation in Constant-Sum Games: Elections and Beyond

Do elections aggregate the private information of office-motivated candidates? Our answer stems from a general result for two-player constant-sum Bayesian games with type-independent payoffs. Under a "completeness" statistical condition, every "identifiable" equilibrium is an ex-post equilibrium. Applied to Downsian elections, the ex-post property implies a sharp bound on information aggregation: equilibrium voter welfare is at best equal to the efficient use of a single candidate's information. In canonical specifications, politicians may "anti-pander" (overreact to their information), whereas some degree of pandering would be socially beneficial. We discuss other applications of the ex-post result.

econ.TH↗

arXiv2024

Beyond Unbounded Beliefs: How Preferences and Information Interplay in Social Learning

When does society eventually learn the truth, or take the correct action, via observational learning? In a general model of sequential learning over social networks, we identify a simple condition for learning dubbed excludability. Excludability is a joint property of agents' preferences and their information. We develop two classes of preferences and information that jointly satisfy excludability: (i) for a one-dimensional state, preferences with single-crossing differences and a new informational condition, directionally unbounded beliefs; and (ii) for a multi-dimensional state, intermediate preferences and subexponential location-shift information. These applications exemplify that with multiple states "unbounded beliefs" is not only unnecessary for learning, but incompatible with familiar informational structures like normal information. Unbounded beliefs demands that a single agent can identify the correct action. Excludability, on the other hand, only requires that a single agent must be able to displace any wrong action, even if she cannot take the correct action.

econ.TH↗

arXiv2023

Single-Crossing Differences in Convex Environments

An agent's preferences depend on an ordered parameter or type. We characterize the set of utility functions with single-crossing differences (SCD) in convex environments. These include preferences over lotteries, both in expected utility and rank-dependent utility frameworks, and preferences over bundles of goods and over consumption streams. Our notion of SCD does not presume an order on the choice space. This unordered SCD is necessary and sufficient for ''interval choice'' comparative statics. We present applications to cheap talk, observational learning, and collective choice, showing how convex environments arise in these problems and how SCD/interval choice are useful. Methodologically, our main characterization stems from a result on linear aggregations of single-crossing functions.

econ.TH↗

arXiv2023

Lemonade from Lemons: Information Design and Adverse Selection

A seller posts a price for a single object. The seller's and buyer's values may be interdependent. We characterize the set of payoff vectors across all information structures. Simple feasibility and individual-rationality constraints identify the payoff set. The buyer can obtain the entire surplus; often, other mechanisms cannot enlarge the payoff set. We also study payoffs when the buyer is more informed than the seller, and when the buyer is fully informed. All three payoff sets coincide (only) in notable special cases -- in particular, when there is complete breakdown in a ``lemons market'' with an uninformed seller and fully-informed buyer.

econ.TH↗

arXiv2023

Test-Optional Admissions

Many U.S. colleges now use test-optional admissions. A frequent claim is that by not seeing standardized test scores, a college can admit a student body it prefers, say with more diversity. But how can observing less information improve decisions? This paper proposes that test-optional policies are a response to social pressure on admission decisions. We model a college that bears disutility when it makes admission decisions that "society" dislikes. Going test optional allows the college to reduce its "disagreement cost". We analyze how missing scores are imputed and the consequences for the college, students, and society.

econ.TH↗

arXiv2023

Sequential Veto Bargaining with Incomplete Information

We study sequential bargaining between a proposer and a veto player. Both have single-peaked preferences, but the proposer is uncertain about the veto player's ideal point. The proposer cannot commit to future proposals. When players are patient, there can be equilibria with Coasian dynamics: the veto player's private information can largely nullify proposer's bargaining power. Our main result, however, is that under some conditions there are also equilibria in which the proposer obtains the high payoff that he would with commitment power. The driving force is that the veto player's single-peaked preferences give the proposer an option to "leapfrog", i.e., to secure agreement from only low-surplus types early on to credibly extract surplus from high types later. Methodologically, we exploit the connection between sequential bargaining and static mechanism design.

econ.TH↗

arXiv2021

Delegation in Veto Bargaining

A proposer requires the approval of a veto player to change a status quo. Preferences are single peaked. Proposer is uncertain about Vetoer's ideal point. We study Proposer's optimal mechanism without transfers. Vetoer is given a menu, or a delegation set, to choose from. The optimal delegation set balances the extent of Proposer's compromise with the risk of a veto. Under reasonable conditions, "full delegation" is optimal: Vetoer can choose any action between the status quo and Proposer's ideal action. This outcome largely nullifies Proposer's bargaining power; Vetoer frequently obtains her ideal point, and there is Pareto efficiency despite asymmetric information. More generally, we identify when "interval delegation" is optimal. Optimal interval delegation can be a Pareto improvement over cheap talk. We derive comparative statics. Vetoer receives less discretion when preferences are more likely to be aligned, by contrast to expertise-based delegation. Methodologically, our analysis handles stochastic mechanisms.

econ.TH↗

arXiv2021

Improving Information from Manipulable Data

Data-based decisionmaking must account for the manipulation of data by agents who are aware of how decisions are being made and want to affect their allocations. We study a framework in which, due to such manipulation, data becomes less informative when decisions depend more strongly on data. We formalize why and how a decisionmaker should commit to underutilizing data. Doing so attenuates information loss and thereby improves allocation accuracy.

econ.TH↗

arXiv2020

Information Validates the Prior: A Theorem on Bayesian Updating and Applications

We develop a result on expected posteriors for Bayesians with heterogenous priors, dubbed information validates the prior (IVP). Under familiar ordering requirements, Anne expects a (Blackwell) more informative experiment to bring Bob's posterior mean closer to Anne's prior mean. We apply the result in two contexts of games of asymmetric information: voluntary testing or certification, and costly signaling or falsification. IVP can be used to determine how an agent's behavior responds to additional exogenous or endogenous information. We discuss economic implications.

econ.TH↗