Navin Kartik, Columbia University: Muddled Information
Department seminar. Navin Kartik is a Professor of Economics at Columbia University. He will present a paper entitled "Muddled Information", co-authored by Alex Frankel.
Navin Kartik. Photo: Columbia University
We study a model of signaling in which agents are heterogeneous on two dimensions. An agent's natural action is the action taken in the absence of signaling concerns. Her gaming ability parameterizes the cost of increasing the action. Equilibrium behavior muddles information across the dimensions. As incentives to take higher actions increase due to higher stakes or more easily manipulated signaling technology more information is revealed about gaming ability, and less about natural actions. We explore a new externality: showing agents' actions to additional observers can worsen information for existing observers. Applications to credit scoring, school testing, and web search are discussed.
Host: Bård Harstad