Joe Basford

Joe Basford

MRes/PhD Economics Student.

Posts by Collection

ETRG

Selected Facts

Nemanja Antic and Archishman Chakraborty

, February 28, 2025

AbstractWe study constrained information design where a sender must provide facts to persuade a receiver to accept or reject a proposal. We show that sender-optimal strategies correspond to maximal-weight matchings on a bipartite graph that incorporates a novel fact-selection constraint, alongside the usual ones. Receiver payoffs are independent of the sender’s cardinal preferences, although these preferences determine the sender-optimal strategy. We show exactly when the sender can induce his ideal decisions. When the receiver can first specify the set of admissible facts, we identify conditions under which the receiver would (not) like to eliminate the sender’s freedom to select facts.

Optimal Hotelling Auctions

Simon Loertscher and Ellen Muir

, March 07, 2025

AbstractWe derive the optimal mechanism for a designer with products at each end of the Hotelling line for sale. Buyers have linear transportation costs and private information about their locations. These are independent draws from a commonly known distribution. Two independent auctions are optimal if and only if two independent auctions are efficient. Otherwise, the problem exhibits countervailing incentives and worst-off types that are endogenous to the allocation rule. Combining a saddle point property with an appropriate ironing procedure allows us to characterize the optimal selling mechanism as a function of a single parameter and to derive associated comparative statics. The optimal mechanism is always ex post inefficient; it involves entering a set of types into a lottery with positive probability. This set and the associated ex post lotteries vary non-trivially with the problem parameters. A two-stage clock auction involving coarse bidding implements the optimal selling mechanism in dominant strategies.

Implementation via Information Design in Binary-Action Supermodular Games

Stephen Morris, Daisuke Oyama, and Satoru Takahashi

, March 14, 2025

AbstractWhat outcomes can be implemented by the choice of an information structure in binary-action supermodular games? An outcome is partially implementable if it satisfies obedience (Bergemann and Morris (2016)). We characterize when an outcome is smallest equilibrium implementable (induced by the smallest equilibrium). Smallest equilibrium implementation requires a stronger sequential obedience condition: there is a stochastic ordering of players under which players are prepared to switch to the high action even if they think only those before them will switch. We then characterize the optimal outcome induced by an information designer who prefers the high action to be played, but anticipates that the worst (hence smallest) equilibrium will be played. In a potential game, under convexity assumptions on the potential and the designer’s objective, it is optimal to choose an outcome where actions are perfectly coordinated (all players choose the same action), with the high action profile played on the largest event where that action profile maximizes the average potential.

From Design to Disclosure

S. Nageeb Ali, Andreas Kleiner, and Kun Zhang

, March 21, 2025

AbstractThis paper studies games of voluntary disclosure in which a sender discloses evidence to a receiver who then offers an allocation and transfers. We characterize the set of equilibrium payoffs in this setting. Our main result establishes that any payoff profile that can be achieved through information design can also be supported by an equilibrium of the disclosure game. Hence, our analysis suggests an equivalence between disclosure and design in these settings. We apply our results to monopoly pricing, bargaining over policies, and insurance markets.

Waiting for News in the Market for Lemons

Brendan Daley and Brett Green

, March 28, 2025

AbstractWe study a dynamic setting in which stochastic information (news) about the value of a privately informed seller’s asset is gradually revealed to a market of buyers. We construct an equilibrium that involves periods of no trade or market failure. The no-trade period ends in one of two ways: either enough good news arrives, restoring confidence and markets reopen, or bad news arrives, making buyers more pessimistic and forcing capitulation that is, a partial sell-off of low-value assets. Conditions under which the equilibrium is unique are provided. We analyze welfare and efficiency as they depend on the quality of the news. Higher quality news can lead to more inefficient outcomes. Our model encompasses settings with or without a standard static adverse selection problem—in a dynamic setting with sufficiently informative news, reservation values arise endogenously from the option to sell in the future and the two environments have the same equilibrium structure.

Keeping the Listener Engaged: A Dynamic Model of Bayesian Persuasion

Yeon-Koo Che, Kyungmin Kim, and Konrad Mierendorff

, May 12, 2025

AbstractWe consider a dynamic model of Bayesian persuasion in which information takes time and is costly for the sender to generate and for the receiver to process, and neither player can commit to their future actions. Persuasion may totally collapse in a Markov perfect equilibrium of this game. However, for persuasion costs sufficiently small, a version of a folk theorem holds: outcomes that approximate Kamenica and Gentzkow’s sender-optimal persuasion as well as full revelation and everything in between are obtained in Markov perfect equilibrium as the cost vanishes.

A Characterization for Optimal Bundling of Products with Nonadditive Values

Soheil Ghili

, May 26, 2025

AbstractThis paper studies the optimal bundling of products with nonadditive values. Under monotonic preferences and single-peaked profits, I show that a monopolist finds pure bundling optimal if and only if the optimal sales volume for the grand bundle is larger than the optimal sales volume for any smaller bundle. I then detail how my analysis relates to ratio monotonicity results on bundling and describe the implications for nonlinear pricing.

Persuasion Meets Delegation

Anton Kolotilin and Andriy Zapechelnyuk

, June 16, 2025

AbstractA principal can restrict an agent's information (the persuasion problem) or discretion (the delegation problem). We study these two problems under standard single‐crossing assumptions on the agent's marginal utility. We show that these problems are equivalent on the set of monotone stochastic mechanisms, implying, in particular, the equivalence of deterministic delegation and monotone partitional persuasion. We also show that the monotonicity restriction is superfluous for linear persuasion and linear delegation, implying their equivalence on the set of all stochastic mechanisms. Finally, using tools from the persuasion literature, we characterize optimal delegation mechanisms, thereby generalizing and extending existing results in the delegation literature.

Multidimensional Monotonicity and Economic Applications

Frank Yang and Kai Hao Yang

, June 23, 2025

AbstractWe characterize the extreme points of multidimensional monotone functions from $[0,1]^n$ to $[0,1]$, as well as the extreme points of the set of one-dimensional marginals of these functions. These characterizations lead to new results in various mechanism design and information design problems, including public good provision with interdependent values; interim efficient bilateral trade mechanisms; asymmetric reduced form auctions; and optimal private private information structure. As another application, we also present a mechanism anti-equivalence theorem for two-agent, two-alternative social choice problems: A mechanism is payoff-equivalent to a deterministic DIC mechanism if and only if they are ex-post equivalent.

portfolio

publications

Commitment via Third-Party Contracts in Bilateral Trade: A Three-Way Equivalence

with Daniele Condorelli and Tanay Kasyap

Last Updated: January 23, 2025

Paper [Supplement]
AbstractA buyer with private value makes a take-it-or-leave-it offer to a seller with private cost. Which trading outcomes are implementable if the seller can sign observable and binding contracts ex ante with a third party that specify transfers as a function of the price posted and whether trade occurs? We establish a three-way equivalence: contract-implementable outcomes coincide with those achievable if the seller commits ex ante to an observable cost-dependent price-acceptance strategy, which are outcomes implementable with direct bilateral trading mechanisms subject to ex post monotonicity of the allocation in the seller's cost, and buyer’s interim incentive and participation constraints. We show royalty schemes can implement ex post efficiency, but also turn buyer monopsony into seller monopoly.

Selling to Learn, Learning to Sell

Last Updated: June 15, 2026

Shaping the Stock: V-Shaped Pricing with Random Discount Windows

with Tanay Kasyap and Francesco Nava

Last Updated: October 01, 2026

A Simple Mechanism-Design Approach to Informed-Principal Problems

Last Updated: October 06, 2026

Paper
AbstractA principal who privately knows her type and designs a mechanism creates a signalling problem. Her choice of mechanism can reveal her information, often generating equilibrium multiplicity depending on beliefs. Informed-principal problems are therefore often avoided in applied work. I show that, with independent one-dimensional private values and quasilinear utility (allowing nonlinear preferences over allocations), the problem reduces to standard optimal mechanism design. Using BIC--DIC equivalence, I show that every principal type attains her full-information payoff, with no signalling analysis and no equilibrium construction. The solution is a Myerson strong solution and pins down the principal’s payoff in every perfect Bayesian equilibrium. It is also robust to beliefs, on and off the equilibrium path. Truthful reporting is a dominant strategy for agents and participation is optimal ex post, meaning no assumption about how agents interpret the principal’s choice of mechanism is needed.

talks