Industrial Organization – Information Economics

Course description
This mini course is an introduction to research in applied theory with a focus on information, incentives and specific applications to online markets.

This is a tools & application course. We start with classic papers (and read them in detail – formal arguments included). We then proceed to applications to digital markets. The idea is to read together very recent papers at the frontier. The list may vary according to the class interests.
Topics covered include: design and advertising of digital products, strategic incentives for information intermediaries, design of algorithms, incentives of financial markets persuasion and privacy regulation.

The syllabus is just provisional. The list of papers may change subject to class interest and time.

Assessment methods
70%: Assignments (referee report and/or presentations and/or discussion of papers). 30%: Final written exam.

Part I) Information economics (Sessions 1-3)

Motivation & Tools (signaling models)

  • DellaVigna, S. and Gentzkow, M., 2010. Persuasion: empirical evidence. Annu. Rev. Econ., 2(1), pp.643-669.
  • Chapter 8 - Fudenberg, D., & Tirole, J. (1991). Game theory, 1991. Cambridge, Massachusetts, 393, 12.

Information design in markets

  • Kamenica, E., & Gentzkow, M. (2011). Bayesian persuasion. The American Economic Review, 101(6), 2590-2615.
  • Johnson, Justin P. and David P Myatt (2006), “On the Simple Economics of Advertising, Marketing, and Product Design”, American Economic Review, 96(3), 756–784.
  • Athey, S., & Levin, J. (2017). The value of information in monotone decision problems. Research in Economics.

Strategic information transmission

  • Crawford, Vincent and Joel Sobel (1982), “Strategic Information Transmission,” Econometrica, 50(6), 1431–1452.
  • Gentzkow, M., & Shapiro, J. M. (2006). Media bias and reputation. Journal of political Economy, 114(2), 280-316.
  • Ottaviani, Marco and Peter N. Sørensen (2006c), “The Strategy of Professional Forecasting,” Journal of Financial Economics, 81(2), 441–466.

Part II) Information in digital markets: Prv (Sessions 3-5)

  • Einav, L., Farronato, C., & Levin, J. (2016). Peer-to-peer markets. Annual Review of
  • Economics, 8, 615-635.
  • Jonathan Levin (2011), The Economics of Internet Markets,
  • (Slides from Econometric Society World Congress) in Advances in Economics and Econometrics. Edited by D. Acemoglu, M. Arellano, and E. Dekel, 2013.
  • Algorithms in digital markets: Facebook, Twitter and Netflix. Theory&Evidence
  • Allcott, H., & Gentzkow, M. (2017). Social Media and Fake News in the 2016 Election (No. w23089). National Bureau of Economic Research.
  • Carroni, Ferrari and Righi (2017). Privacy and persuasion: are we getting the best deal? Mimeo