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Working papers

Information Markets and Nonmarkets
Dirk Bergemann and Marco Ottaviani

This chapter, prepared for Volume 4 of the Handbook of Industrial Organization, overviews contributions to the industrial organization of information markets and nonmarkets, while attempting to maintain a balance between foundational frameworks and more recent developments. We start by reviewing mechanism-design approaches to modeling the trade of information. We then cover ratings, predictions, and recommender systems. We turn to forecasting contests, prediction markets, and other institutions designed for collecting and aggregating information from decentralized participants. Finally, we discuss science as a prototypical information nonmarket with participants who interact in a non-anonymous way to produce and disseminate information. 

Modificato il 17/08/2021

Marco Ottaviani

Model of decentralized allocation of subsidies through competitive grantmaking:

(a) in single field an increase in the budget results in an decrease in the success rate if and only if the type distribution has increasing hazard rate

(ii) grading on a curve with costly participaton leads to the relative evaluation paradox: nobody participates if evaluation is sufficiently precise

(iii) commonly adopted (sub)proportional budget allocation rules across fields result in perverse participation incentives: participation in a field decreases in the precision of evaluation in that field (and increases in the precision of evaluation in other fields) 

Modificato il 24/09/2021

Looking into Crystal Balls: An Experiment on Reputational Cheap Talk
Debrah Meloso, Marco Ottaviani, and Salvatore Nunnari

Do expert motivated by their reputation for being well informed have an incentive to misreport their information? As predicted by reputational cheap talk theory, reporters are more likely to report truthfully when the state of the world is more uncertain and when evaluators conjecture that reporters always report truthfully. However, evaluators have difficulty learning reporters' strategies and tend to overreact to message accuracy, exacerbating reporters' incentives to misreport.

Modificato il 22/12/2020

Separate or Joint Financing? Optimal Conglomeration with Bankruptcy Costs
Albert Banal Estanol and Marco Ottaviani.

How should multiple and possibly heterogeneous risky projects be optimally grouped into separately financed conglomerates?

Modificato il 14/05/2013

Approval Regulation and Learning, with Application to Timing of Merger Control
Marco Ottaviani and Abraham Wickelgren

This paper is the winner of the 2009 Robert F. Lanzillotti Prize for best paper in antitrust economics at the International Industrial Organization Conference. Casts tradeoff between ex ante regulation (based on limited information about sign and magnitude of externality) and ex post policy intervention (involving costly reversion) as a collective experimentation problem.          

Modificato il 21/12/2012

Search Agency
Tracy R. Lewis and Marco Ottaviani

How should a principal provide agents with incentives to conduct sequential search?

Modificato il 21/12/2012

The Timing of Parimutuel Bets
Marco Ottaviani and Peter Norman Sorensen.

Timing of parimutuel bets driven by two incentives: bettors want to place large early bets to pre-empt the rivals, but also want to wait to conceal information.

Modificato il 21/06/2013

Parimutuel versus Fixed-Odds Markets
Marco Ottaviani and Peter Norman Sorensen

Comparison of equilibrium outcomes in parimutuel and fixed-odds competitive markets with privately informed bettors.

Modificato il 21/06/2013

Forecasting and Rank-Order Contests
Marco Ottaviani and Peter Norman Sorensen

Characterization of equilibrium in Hotelling location model with private information, with applications to strategic forecasting and political economy.

Modificato il 21/06/2013

Contracts and Competition in the Pay-TV Market
David Harbord and Marco Ottaviani

How is downstream competition affected by the contractual terms used to sell essential inputs to competitors?

Modificato il 21/12/2012

The Economics of Advice
Marco Ottaviani

Analysis of issues relevant for regulation of independent financial advisers: communication to unsophisticated audience, information acquisition by advisers, uncertainty about the conflict of interest, and optimal incentive design.

Modificato il 21/12/2012

Modificato il 18/11/2011

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