Research Interests:

• Microeconomic Theory
• Game Theory
• Industrial Organization
• Networks

Communication is important in settings where information influences decisions. My research asks how structured, local communication among consumers affects markets where those consumers interact with firms who would like to sell to them, when the two groups have asymmetric information. I model local communication by constructing a network that links consumers who talk to each other, and examine how the predictions of games and models with asymmetric information - for example quality signaling, reputation-building, marketing, and search problems - respond when the location of information flow in the network is chosen by firms or determined by consumers' actions.

Papers:

Signaling to a Network of Consumers (pdf)

This paper asks how localized communication affects quality signaling. I present a game in which a monopolist who can both set price and target sales seeks to sell a product of hidden, exogenous quality to consumers who share information locally with their neighbors in their social network. Equilibria exist in which the high-type monopolist forgoes price signaling that separates it from the low type before round 1 in favor of restricting and locating early sales to allow communication to reveal quality, and so separate types after an initial pooling period. The highest-payoff equilibria for a monopolist with a high quality product always belong to this class and, for a natural refinement of the equilibrium notion, are the only equilibria of the game. More generally, in all equilibria satisfying the Intuitive Criterion, the number of sales in the first round is bounded above by the network graph's domination number, which is the smallest number that allows communication to reveal type to all other consumers.

Marketing to a Network of Consumers (pdf)

This paper presents a duopolistic marketing game with local communication. Two identical firms simultaneously choose a set of consumers to inform about their product today; tomorrow all neighbors of consumers in that set will also learn about the existence of the product.
Equilibrium selection depends on both the advertising cost of informing a consumer and on the nature of price competition over those consumers both firms choose to inform. If firms are precluded from competing in price, firms choose symmetric strategies in equilibrium: both inform all consumers if costs are sufficiently low, and both inform the same word-of-mouth maximizing set of consumers if costs are high. This implies that firms would prefer a higher cost of advertising services. If firms do compete in price, all equilibria have the firms informing disjoint but exhaustive sets of consumers in equilibrium. The marketing game drives firms to distinct regions of the network, nullifying potential price competition.

Reputation with Local Information (preliminary)

In this paper I study a infinite-horizon reputation game between a network of consumers and a single outside firm. One consumer is selected to transact with the firm in each period, and the firm has discretion over what quality to provide if the consumer decides to buy. Consumers can see only local information, in that they observe neighbors' transactions but cannot see those further away. I
show that heterogeneity across individuals in the number and identity of observers to that individual's transactions, and the observability of this information structure by the firm, are significant. Equilibria in which high quality is provided to all consumers along the equilibrium path generally require more complicated, coordinated consumer strategies when the firm can observe the
information structure. More generally, when the firm knows the information structure, consumers in 'vulnerable' areas of the network will never receive high quality without some degree of coordinated action among consumers.