Topics in Economic Theory (S1): Strategic Information Transmission
Akt: 03.04.2023 12:00
Tue, 12:00 - 14:00
(K 005 Seminarraum UG)
Content & learning objectives
In a wide array of economically relevant situations, economic agents aim to convey information to others in order to influence their decisions. Central banks communicate their inflation targets and likely policy measures in order to influence pricing, investment and consumption choices. Financial regulators run stress tests to convince bank customers of the financial stability of their banks and avoid bank runs. Pharmaceutical companies conduct clinical trias to convince regulators of the safety, effectiveness, and high quality of a medicine. Sales’ people disclose product information to consumers in order to convince them to buy. Lobbyists provide information to politicians in order to influence their legislative or executive decisions.
In this seminar, we want to study theories of strategic information transmission and their application to economically relevant situations as those mentioned above. The participants of this seminar gain a sound conceptual knowledge of the mechanisms behind the strategic transmission of information in economic settings. This understanding shall enable them to critically assess different approaches to designing or regulating informational institutions such as monetary policy accounts, stress tests, clinical trials, consumer information rules, and lobbyists’ access to politicians or high-level bureaucrats.
The seminar has three parts. The first part consists of lectures that introduce the topic of the seminar and acquaint the participants with the main models of strategic information transmission, in particular the models of cheap talk, disclosure of hard information, and Bayesian persuasion. In the second part, we are going to discuss research papers that further develop these models and apply them to various economic situations. After the second part, the participants write a seminar paper. In the third part of the seminar, participants are going to present the results of their term paper.