Essays in Economic Theory

Abstract

This thesis studies information aggregation and reputation management in three microeconomic environments.<br /> In the first chapter, I consider a committee voting setup with two rounds of voting where committee members who possess private information about the state of the world have to make a binary decision. I investigate incentives for truthful revelation of their information in the first voting period. Coughlan (2000) shows that members reveal their information in a straw poll only if their preferences are homogeneous. By taking costs of time into account, I demonstrate that committees have strictly higher incentives to reveal information if a decision with high levels of consensus can already be made in the straw poll. In such scenarios, members of all homogeneous and some heterogeneous juries are strictly better off when the requirement for early decisions is chosen carefully.<br /> The second chapter studies a seller whose reputation is determined by the types of her customers. In the model, a monopolist repeatedly sells a good to heterogeneous customers who, depending on their type, increase or decrease the seller's reputation. First, I study a trade-off between realizing current-period profits and building reputation for future periods. Second, I analyze reputation dynamics. Over time, reputation always converges to a stable level. Convergence behavior, however, depends strongly on the good's durability. While the reputation of less durable goods fluctuates around the long-run reputation, the reputation of more durable goods converges monotonically.<br /> In the third chapter, I examine a dynamic reputation model in which a long-lived online seller of unknown logistical ability competes against an offline retailer. In order to deliver goods to her short-lived buyers, the online seller has to employ one of two shippers which differ in their expected delivery time. Her buyers, in turn, update their beliefs about the seller's logistical ability based on their experienced waiting time for the good. I find that incentives to assign a fast shipper depend significantly on the information about the delivery process that buyers can observe. I compare the equilibrium outcomes of four specifications where buyers can or cannot observe the shipper's quality upon delivery of the good, and can or cannot track and trace the delivery process in detail. The ability to track the delivery proves harmful to the buyers' welfare in most cases, whereas the ability to observe the shipper's quality can be beneficial or harmful depending on the exact setup and parameter specification.