Essays on dynamic games
OA Version
Citation
Abstract
This dissertation consists of two essays that study how information transmits and disseminates across players in dynamic environments, either directly through communication channels, or indirectly through their actions. In the first chapter, "Optimal Disclosure Windows," I study a dynamic disclosure game in which an agent controls the time window over which information flows to the decision maker, but does not control the content of that information. In equilibrium, the agent has incentives to delay the start of disclosure to continue to learn privately for some time. This delay exacerbates the information asymmetry between the agent and the decision maker as the agent is learning while the decision maker is not. The length of the disclosure window is determined by the degree of information asymmetry at the beginning of the window, with longer windows associated with greater information asymmetry. As a result, the delay in the start of disclosure requires a longer disclosure window. In the second chapter, "Dynamic Coordination with Informational Externalities," I study a two-player continuous-time dynamic coordination game with observational learning. Each player has one opportunity to make a reversible investment with an uncertain return that is realized only when both players invest. Each player learns about the potential return by observing a private signal and the actions of the other player. In equilibrium, players' roles as leader and follower are endogenously determined. Information aggregates in a single burst initially, then gradually through delayed investment and disinvestment over time. More precise signals lead to faster coordination conditional on initial disagreement, but might also increase the probability of initial disagreement.
Description
2023