| In this dissertation, I explore how different economic settings mold the endogenously arising incentives for acquiring, sharing, and exploiting information. One strand of my research characterizes how agents react to changes in the quality of information and uses the characterization to study informational externalities. The second strand of my research explores the role of informational asymmetries in mechanism design problems.;In the first chapter, a joint work with Rene Leal Vizcaino, we study an agent who chooses an action after acquiring information about an uncertain state. From an ex-ante perspective, the agent's optimal action is an endogenously determined random variable. We study how the quality of information affects the distribution of the optimal action. In particular, we study responsiveness, a comparative statics that captures mean-preserving spreads and second-order stochastic dominance shifts in the distribution of the optimal action. The higher the quality of information, the more closely the agent tailors her actions to the state, and consequently, under conditions we derive on payoffs, the more responsive the optimal action.;In the second chapter, I consider a model of moral hazard with risk neutral parties, limited liability, and an informed principal. The contractible outcome is correlated to both the principal's private information and the agent's hidden action. In contrast to a model without a privately informed principal, or without limited liability, I show that the first-best payoff cannot be implemented by any equilibrium mechanism. Furthermore, limited liability precludes the existence of equilibrium refinements such as (Strongly) Neologism proofness.;In the last chapter, I study a continuous time principal-agent model in which an unknown parameter and the agent's hidden effort affect the distribution of observable outcomes. The principal and the agent learn about the parameter by observing past outcomes. The agent's current effort has an implicit long-term effect through the belief dynamics and a deviation in effort creates a persistent disparity between the principal's and the agent's beliefs. This disparity affects the rate of learning as well as how the two evaluate the expected distribution of future outcomes which in turn affects their evaluation of future payoffs. Placing minimal restrictions on how effort and the parameter interact, I derive necessary and sufficient conditions for incentive compatible contracts. In addition to the agent's promised utility, the covariance between the on-path posterior beliefs and the agent's total payoff serves as a second state variable capturing the marginal long-run effects of effort. |
