Research

Abstract:

Contrary to the common sentiment, I argue that consumers are better off with biased media firms rather than unbiased ones. To make such an argument, I use a simple communication game between potentially biased experts (media firms) and a decision maker (news consumers). In the game, information is costly for experts to acquire, all parameters are common knowledge, and reported information is verifiable. Upon characterizing the informative equilibria, in which reports are fully revealing, I show that biased experts have a higher willingness to pay for information than unbiased ones. In addition, competition among experts further improves the welfare of the decision maker, and the size of those improvements does not depend on having asymmetrically biased experts.
(JEL D83, L82, D70)

Abstract:

This paper presents a model to illustrate the usefulness of anonymity as a policy. On the one hand, anonymity protects agents' identity and thus withholds information. On the other hand, anonymity can induce information revelation when commitment problems exist. For instance, police may obtain more information from citizens by soliciting anonymous crime tips rather than non-anonymous crime tips. If the police are unable to credibly commit to not prosecuting criminals who call in non-anonymous crime tips, then implementing anonymity may improve the information acquired. In particular, I show that a non-anonymous policy with commitment yields the best outcome, followed by an anonymous policy as second best, lastly followed by a non-anonymous policy without commitment as the worst outcome.