Uncertainty Resolution, Private Information Aggregation and the Cournot Competitive Limit

1985 ◽  
Vol 52 (1) ◽  
pp. 69 ◽  
Author(s):  
Thomas R. Palfrey
Keyword(s):  
Private Information ◽  
Information Aggregation ◽  
Uncertainty Resolution

scholarly journals Updating Awareness and Information Aggregation

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Spyros Galanis ◽  
Stelios Kotronis
Keyword(s):  
Mild Condition ◽  
Private Information ◽  
Dynamic Environment ◽  
Information Aggregation ◽  
Aggregate Information

AbstractThe ability of markets to aggregate information through prices is examined in a dynamic environment with unawareness. We find that if all traders are able to minimally update their awareness when they observe a price that is counterfactual to their private information, they will eventually reach an agreement, thus generalising the result of Geanakoplos and Polemarchakis (1982). Moreover, if the traded security is separable, then agreement is on the correct price and there is information aggregation, thus generalizing the result of Ostrovsky (2012) for non-strategic traders. We find that a trader increases her awareness if and only if she is able to become aware of something that other traders are already aware of and, under a mild condition, never becomes aware of anything more. In other words, agreement is more the result of understanding each other, rather than being unboundedly sophisticated.

scholarly journals Learning from prices: information aggregation and accumulation in an asset market

2020 ◽  
Author(s):  
Michele Berardi
Keyword(s):  
Private Information ◽  
Dynamic Properties ◽  
Public Information ◽  
Information Aggregation ◽  
Time Varying ◽  
Private Signals ◽  
Private And Public ◽  
Fundamental Value ◽  
Over Time

Abstract Can prices convey information about the fundamental value of an asset? This paper considers this problem in relation to the dynamic properties of the fundamental (whether it is constant or time-varying) and the structure of information available to agents. Risk-averse traders receive two potential signals each period: one exogenous and private and the other, prices, endogenous and public. Prices aggregate private information but include aggregate noise. Information can accumulate over time both through endogenous and exogenous signals. With a constant fundamental, the precision of both private and public cumulative information increases over time but agents put progressively more weight on the endogenous signals, asymptotically disregarding private ones. If the fundamental is time-varying, the use of past private signals complicates the role of prices as a source of information, since it introduces endogenous serial correlation in the price signal and cross-correlation between it and innovations in the fundamental. A modified version of the Kalman filter can still be used to extract information from prices and results show that the precision of the endogenous signals converges to a constant, with both private and public information used at all times.

scholarly journals Information Aggregation with Delegation of Votes

2021 ◽  
Author(s):  
Amrita Dhillon ◽  
Grammateia Kotsialou ◽  
Dimitris Xefteris
Keyword(s):  
Decision Making ◽  
Private Information ◽  
Information Aggregation ◽  
The State ◽  
Electronic Voting ◽  
Policy Makers ◽  
Blockchain Technology ◽  
The World ◽  
Recent Developments ◽  
Liquid Democracy

Recent developments in blockchain technology have made possible greater progress on secure electronic voting, opening the way to better ways of democratic decision making. In this paper we formalise the features of ``liquid democracy'' which allows voters to delegate their votes to other voters, and we explore whether it improves information aggregation as compared to direct voting. We consider a two-alternative setup with truth-seeking voters (informed and uninformed) and partisan ones (leftists and rightists), and we show that delegation improves information aggregation in finite elections. We also propose a mechanism that further improves the information aggregation properties of delegation in private information settings, by guaranteeing that all vote transfers are from uninformed to informed truth-seeking voters. Delegation offers effective ways for truth-seeking uninformed voters to boost the vote-share of the alternative that matches the state of the world in all considered setups and hence deserves policy makers' attention.

scholarly journals Market Selection and the Information Content of Prices

Econometrica ◽  
2021 ◽  
Vol 89 (5) ◽  
pp. 2049-2079
Author(s):  
Alp E. Atakan ◽  
Mehmet Ekmekci
Keyword(s):  
Information Content ◽  
Private Information ◽  
Information Aggregation ◽  
Reserve Price ◽  
Market Selection ◽  
Uniform Price Auction ◽  
Uniform Price ◽  
Common Value ◽  
Common Value Auctions ◽  
Price Auction

We study information aggregation when n bidders choose, based on their private information, between two concurrent common‐value auctions. There are k s identical objects on sale through a uniform‐price auction in market s and there are an additional k r objects on auction in market r, which is identical to market s except for a positive reserve price. The reserve price in market r implies that information is not aggregated in this market. Moreover, if the object‐to‐bidder ratio in market s exceeds a certain cutoff, then information is not aggregated in market s either. Conversely, if the object‐to‐bidder ratio is less than this cutoff, then information is aggregated in market s as the market grows arbitrarily large. Our results demonstrate how frictions in one market can disrupt information aggregation in a linked, frictionless market because of the pattern of market selection by imperfectly informed bidders.

Public Protests and Policy Making*

2016 ◽  
Vol 132 (1) ◽  
pp. 485-549 ◽  
Author(s):  
Marco Battaglini
Keyword(s):  
Social Media ◽  
Policy Maker ◽  
Private Information ◽  
Policy Making ◽  
Information Aggregation ◽  
Decision Makers ◽  
Full Information ◽  
Precise Information ◽  
Aggregate Information ◽  
Technological Advances

Abstract Technological advances and the development of social media have made petitions, public protests, and other form of spontaneous activism increasingly common tools for individuals to influence decision makers. To study these phenomena, in this article I present a theory of petitions and public protests that explores their limits as mechanisms to aggregate information. The key assumption is that valuable information is dispersed among citizens. Through petitions and protests, citizens can signal their private information to the policy maker, who can then choose to use it or not. I first show that if citizens’ individual signals are not sufficiently precise, information aggregation is impossible, no matter how large is the population of informed citizens, even if the conflict with the policy maker is small. I then characterize the conditions on conflict and the signal structure that guarantee information aggregation. When these conditions are satisfied, I show that full information aggregation is possible as the population grows to infinity. When they are not satisfied, I show that information aggregation may still be possible if social media are available.

scholarly journals Crises and Prices: Information Aggregation, Multiplicity, and Volatility

2006 ◽  
Vol 96 (5) ◽  
pp. 1720-1736 ◽  
Author(s):  
George-Marios Angeletos ◽  
Iván Werning
Keyword(s):  
Private Information ◽  
Imperfect Information ◽  
Asset Price ◽  
Information Aggregation ◽  
Sources Of Information ◽  
Noisy Signal ◽  
Small Noise ◽  
Endogenous Information ◽  
Role Of Information

Crises are volatile times when endogenous sources of information are closely monitored. We study the role of information in crises by introducing a financial market in a coordination game with imperfect information. The asset price aggregates dispersed private information acting as a public noisy signal. In contrast to the case with exogenous information, our main result is that uniqueness may not obtain as a perturbation from perfect information: multiplicity is ensured with small noise. In addition, we show that: (a) multiplicity may emerge in the financial price itself; (b) less noise may contribute toward nonfundamental volatility even when the equilibrium is unique; and (c) similar results obtain for a model where individuals observe one another's actions, highlighting the importance of endogenous information more generally.

Sign in / Sign up

Export Citation Format

Share Document