Showing 1 - 10 of 323
Persistent link: https://www.econbiz.de/10006238809
In equilibrium play of a two-round tournament, we find that underdogs exert more effort in the opening round whereas favorites save more effort for the final. Ability differences are therefore compressed in the opening round so upsets are more likely and amplified in the final so blowouts are...
Persistent link: https://www.econbiz.de/10005567964
Persistent link: https://www.econbiz.de/10002877737
In equilibrium play of a two-round tournament we find that underdogs exert more effort in the opening round while favorites save more effort for the final. Ability differences between players are therefore compressed in the opening round so upsets are more likely, and amplified in the final so...
Persistent link: https://www.econbiz.de/10014029347
We examine ascending auctions with independent private values and a buyout option. The buyout option gives each buyer the opportunity to end the auction prematurely and acquire the object for a fixed price. We fully characterize the unique symmetric equilibrium and show that buyers with...
Persistent link: https://www.econbiz.de/10005453621
We consider the credibility, persuasiveness, and informativeness of multidimensional cheap talk by an expert to a decision maker. We find that an expert with state-independent preferences can always make credible comparative statements that trade off the expert's incentive to exaggerate on each...
Persistent link: https://www.econbiz.de/10005453617
Should a seller with private information sell the best or worst goods first? Considering the sequential auction of two stochastically equivalent goods, we find that the seller has an incentive to impress buyers by selling the better good first because the seller’s sequencing strategy...
Persistent link: https://www.econbiz.de/10005453623
Consumers are rarely sure of the exact standard that product labels and other certificates of quality represent. We show that any such uncertainty creates a “Groucho effect” in which seeing that a product has a label leads consumers to infer that the standard for the label itself is not very...
Persistent link: https://www.econbiz.de/10005453629
Sellers often make explicit or implicit product claims without providing evidence. We show that such "puffery" of product attributes through pure cheap talk is credible and helps buyers make a better decision. Puffing one attribute of a product leads buyers to positively update their impression...
Persistent link: https://www.econbiz.de/10011096402
We develop and experimentally test a discrete choice model of an expert who recommends one of multiple actions to a decision maker who might take no action. Consistent with the recent theoretical literature on cheap talk recommendations, we find that recommendations are "persuasive" in that they...
Persistent link: https://www.econbiz.de/10011096411