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    Research and Approval Process: The Organization of Persuasion (in corso di pubblicazione)
    Emeric Henry and Marco Ottaviani
    American Economic Review, forthcoming

    Organizational deconstruction of Wald's model of sequential information acquisition, bridging experimentation with persuasion. The payoff and control rights of a statistician (planner) are split between an evaluator and an informer. The informer provides costly information with the aim of persuading the evaluator to approve. Welfare analyis + application to approval regulation, including FDA's supervision of clinical trials.


    Modificato il 19/12/2018

    Persuasion Bias in Science: Can Economics Help? (01/10/2017)
    Alfredo Di Tillio, Marco Ottaviani, and Peter Norman Sorensen
    Economic Journal, 127 (October), F266–F304.

    A researcher aims at persuading an evaluator that the causal effect of a treatment outweighs its cost, so as to justify acceptance. The researcher uses private information to (1) sample subjects based on their treatment effect (challenging external validity), (2) assign subjects to treatment based on their baseline outcome (challenging internal validity), or (3) selectively report experimental outcomes (challenging both external and internal validity).

    Persuasion Bias in Science: Can Economics Help?

    Modificato il 12/12/2017

    Price Reaction to Information with Heterogeneous Beliefs and Wealth Effects: Underreaction, Momentum, and Reversal (2015)
    Marco Ottaviani and Peter Norman Sorensen
    American Economic Review, 105 (1): 1-34, January 2015.

    (supersedes previous paper titled: "Aggregation of Information and Beliefs: Asset Pricing Lessons from Prediction Markets")

    When traders with heterogeneous prior beliefs can invest a limited amount of money (or their absolute risk aversion is decreasing in wealth), the equilibrium price under-reacts to information.

    Modificato il 24/09/2017

    Accept or Reject? An Organizational Perspective (01/05/2014)
    Umberto Garfagnini, Marco Ottaviani, and Peter Norman Sørensen
    International Journal of Industrial Organization, 34: 66-74, May 2014

    How should an informed principal decide based on the advice of an informed but biased party?

    Modificato il 12/06/2014

    The Flip Side of Financial Synergies: Coinsurance versus Risk Contamination (2013)
    Albert Banal Estanol, Marco Ottaviani and Andrew Winton
    Review of Financial Studies, 26 (12): 3142-3181, December 2013.

    Characterizes tradeoff between co-insurance and risk contamination with debt financing and default costs, depending on the bankruptcy recovery rate, the mean, the variability, the skewness, and the correlation of returns.

    Modificato il 21/01/2015

    Sales Talk, Cancellation Terms, and the Role of Consumer Protection (2013)
    Roman Inderst and Marco Ottaviani
    Review of Economic Studies, 80 (3): 1002-1026, July 2013

    Analysis of commitment role of contract cancellation and product return policies when sellers advise buyers about the suitability of the products sold. Effectiveness of competition and consumer protection policies depends on the rationality of customers.

    Modificato il 12/06/2014

    Regulating Financial Advice (2012)
    Roman Inderst and Marco Ottaviani
    European Business Organization Law Review 13: 237-246

    Motivated by recent policy changes across many countries, this review article discusses the rationale for various policies that target financial advice in the market for retail financial services.

    Modificato il 04/07/2013

    How (Not) to Pay for Advice: A Framework for Consumer Financial Protection (01/08/2012)
    Roman Inderst and Marco Ottaviani
    Journal of Financial Economics, 105(2): 393-411, August 2012

    Why are brokers commonly compensated indirectly through contingent commissions paid by product providers rather than through advice fees paid by customers? The effectiveness of various policy interventions are analyzed depending on the rationality of customers.

    Modificato il 10/01/2014

    Financial Advice (06/2012)
    Roman Inderst and Marco Ottaviani
    Journal of Economic Literature, 50(2): 494-512, June 2012

    Overviews the pros and cons of various policy interventions in the area of financial advice, such as imposing mandatory disclosure, banning commissions, and regulating contract cancellation terms.

    Modificato il 10/01/2014

    Competition through Commissions and Kickbacks (04/2012)
    Roman Inderst and Marco Ottaviani
    American Economic Review, 102(2): 780-809, April 2012

    Embeds provision of product advice by an information intermediary into Hotelling model of competition; characterizes when caps on commissions, mandatory disclosure, and other policy interventions aimed at subduing the use of commissions have unintended consequences for the efficiency of advice

    Modificato il 10/01/2014

    Consumer Protection in Markets with Advice (01/04/2010)
    Roman Inderst and Marco Ottaviani
    Competition Policy International, 6(1): 47-64, Spring 2010

    Accessible introduction prepared for a Symposium on Behavioral Economics

    Modificato il 03/06/2016

    Ex Ante or Ex Post Competition Policy? A Progress Report (05/2011)
    Marco Ottaviani and Abraham Wickelgren
    International Journal of Industrial Organization 29 (2): 356-359, May 2011

    In the context of merger policy we analyze the choice between ex post control (which is based on the more accurate information that becomes available in the intervening period) and ex ante control (which entails temporary losses to social welfare and reversal costs incurred to unscramble the eggs).

    Modificato il 10/01/2014

    Noise, Information, and the Favorite-Longshot Bias in Parimutuel Predictions (02/2010)
    Marco Ottaviani and Peter Norman Sorensen
    American Economic Journal: Microeconomics 2(1), 58-85, February 2010

    Testable implications for the sign and extent of favorite-longshot bias depending on the information to noise ratio present in the market, as affected by the number of bettors, the number of outcomes, the amount of private information, the level of participation generated by recreational interest in the event, the divisibility of bets, the presence of ex post noise, as well as ex ante asymmetries across outcomes.

    Modificato il 10/01/2014

    Surprised by the Parimutuel Odds? (12/2009)
    Marco Ottaviani and Peter Norman Sorensen
    American Economic Review, 99(5), 2129-2134

    The favorite-longshot bias observed in parimutuel markets is consistent with the use of private information by bettors taking simultaneous positions. The ex post realization of a high market probability indicates favorable information about the occurrence of an outcome---and the opposite for longshots.

    Modificato il 10/01/2014

    Misselling through Agents (06/2009)
    Roman Inderst and Marco Ottaviani
    American Economic Review, 99(3), 883-908

    How to incentivize sales agents to sell, but not to missell to customers for whom the product is unsuitable? Analysis of the internal organization of the sales process, the commitment effect of transparency of commissions, and the role for self regulation and policy intervention.

    Modificato il 10/01/2014

    Information Sharing in Common Agency: When is Transparency Good? (03/2009)
    Norbert Maier and Marco Ottaviani
    Journal of the European Economic Association, 7(1), 162-187

    When should principals dealing with a common agent share their individual performance measures about the agent's unobservable effort?

    Modificato il 10/01/2014

    Monopoly Pricing in the Binary Herding Model (11/2008)
    Subir Bose, Gerhard Orosel, Marco Ottaviani and Lise Vesterlund
    Economic Theory, 37(2), 203-241

    Full characterization of monopoly prices and learning dynamics when buyers have binary signals about the quality of the good sold and observe the history of past purchases.

    Modificato il 10/01/2014

    The Promise of Prediction Markets (16/05/2008)
    Kenneth J. Arrow, Robert Forsythe, Michael Gorham, Robert Hahn, Robin Hanson, John O. Ledyard, Saul Levmore, Robert Litan, Paul Milgrom, Forrest D. Nelson, George R. Neumann, Marco Ottaviani, Thomas C. Schelling, Robert J. Shiller, Vernon L. Smith, E
    Science, 320(5878), 877-878

    The ability of groups of people to make predictions is a potent research tool that should be freed of unnecessary government restrictions.

    Modificato il 20/02/2015

    Bank Mergers and Diversification: Implications for Competition Policy (06/2007)
    Albert Banal-Estanol and Marco Ottaviani
    European Financial Management, 13(3), 578-590

    Risk-averse banks first merge and then compete in the markets for loans and deposits, in the presence of interest rate risk and default risk for individual loans. If depositors have more correlated shocks than borrowers, bank mergers are relatively worse for depositors than for borrowers.     

    Modificato il 20/02/2015

    Credulity, Lies, and Costly Talk (05/2007)
    Navin Kartik, Marco Ottaviani and Francesco Squintani
    Journal of Economic Theory, 134(1), 93-116

    Language inflation and deception result when either the receiver is credulous or the sender finds it costly to misrepresent information (due to legal, technological, or moral constraints)subsumes the first part of working paper Non-Fully Strategic Information Transmission.

    Modificato il 20/02/2015

    Outcome Manipulation in Corporate Prediction Markets (04/2007)
    Marco Ottaviani Peter Norman Sorensen
    Journal of the European Economic Association (Papers and Proceedings), 5(2-3), 554-563

    Analysis of the amount of outcome manipulation (and impact on prices) resulting in a simple model of a corporate prediction market.

    Modificato il 10/01/2014

    Naive Audience and Communication Bias (12/2006)
    Marco Ottaviani and Francesco Squintani
    International Journal of Game Theory, 35(1), 129-150

    The amount of information that is revealed to strategic receivers increases in the fraction of naive receivers and in the informational advantage of the sender, whereas it decreases in level of the conflict of interestsupersedes the second part of working paper Non-Fully Strategic Information Transmission.

    Modificato il 20/02/2015

    Dynamic Monopoly Pricing and Herding (2006)
    Subir Bose, Gerhard Orosel, Marco Ottaviani and Lise Vesterlund
    RAND Journal of Economics, 37(4), 912-928

    Dynamic pricing by a monopolist selling to buyers who learn from each other’s purchases, with implications for herd behavior and welfare.

    Modificato il 10/01/2014

    Mergers with Product Market Risk (2006)
    Albert Banal-Estanol and Marco Ottaviani
    Journal of Economics & Management Strategy, 15(3), 577-608

    Strategic implications of risk sharing in mergers, with predictions for the method of payment used (cash versus shares).

    Modificato il 20/02/2015

    The Strategy of Professional Forecasting (08/2006)
    Marco Ottaviani and Peter Norman Sorensen
    Journal of Financial Economics, 81(2), 441-466

    Framework for modeling strategic behavior of professional forecasters: (1) Concern for perceived talent leads to excessive conformity if the market is naive and loss of information if the market is rational. (2) Competition for best accuracy leads to excessive forecast differentiation.


    Modificato il 20/02/2015

    Reputational Cheap Talk (2006)
    Marco Ottaviani and Peter Norman Sorensen
    RAND Journal of Economics, 37(1) 155-175

    Communication by an expert concerned about appearing to be well informed, part IIgeneral analysis with focus on incentives to deviate from truthtelling, effect of self-knowledge of information quality, and multiple experts speaking simultaneously.

    Modificato il 20/02/2015

    Professional Advice (01/2006)
    Marco Ottaviani and Peter Norman Sorensen
    Journal of Economic Theory, 126(1), 120-142

    Communication by an expert concerned about appearing to be well informed, part Ianalysis of tractable example with focus on characterization of equilibrium, comparative statics, and multiple experts speaking sequentially.

    Modificato il 02/07/2013

    The Transition to Digital Television (01/2005)
    Jerome Adda and Marco Ottaviani
    Economic Policy, 41, 160-209

    Conceptual and empirical framework for evaluating policies for the transition from analogue to digital television.

    Modificato il 02/07/2013

    Price Competition for an Informed Buyer (12/2001)
    Giuseppe Moscarini and Marco Ottaviani
    Journal of Economic Theory, 101(2), 457-493

    Analysis of competition for a buyer with private information on the relative quality of the sellers, with a Hotelling reinterpretation and comparative statics with respect to buyer’s private information and public information.

    Modificato il 20/02/2015

    The Value of Public Information in Monopoly (11/2001)
    Marco Ottaviani and Andrea Prat
    Econometrica, 69(6), 1673-1683

    When does a price-discriminating monopolist want to reveal public information to its buyers? The linkage principle meets mechanism design by an informed principal.

    Modificato il 20/02/2015

    Information Aggregation in Debate: Who Should Speak First? (09/2001)
    Marco Ottaviani and Peter Sorensen
    Journal of Public Economics, 81(3), 393-421

    Dynamics of group think in a committee with members concerned about their reputation for expertise, with implications for the organization of debate.



    Modificato il 02/07/2013

    Herd Behavior and Investment: Comment (06/2000)
    Marco Ottaviani and Peter Sorensen
    American Economic Review, 99(3), 695-704

    Paper (i) uncovers the close connection between reputational and statistical herding and (ii) shows that reputational cascades also result when better informed agents do not have access to signals that are more positively correlated conditional on the state.

    Modificato il 20/02/2015

    Social Learning in a Changing World (1998)
    Giuseppe Moscarini, Marco Ottaviani and Lones Smith
    Economic Theory, 11, 657-665

    Only temporary informational cascades can arise if the state of the world is changing stochastically over time during the learning process.

    Modificato il 02/07/2013

Modificato il 18/11/2011

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