Essays on Information Economics

Abstract

<p>This thesis contains essays on the economics of information. In particular it focuses on specific environments where groups of individuals are faced with both uncertainty and having their main source of information on the underlying state of the world being controlled by outside parties with their own agenda. The goal of this thesis is to characterize the equilibrium behavior and examine the welfare implications of having outside parties controlling the group's information structure. The first chapter studies the coordination and free-riding problem commonly found in the private provision of a public good and how a fundraiser can help alleviate the issues by designing information structures that determine the donors' behavior. And the second chapter studies a duopoly model where the firms invest in advertising to divert the consumers into adopting their product. The group's welfare can be improved even if their interests are not closely aligned with the outside parties' interests as long the information gains are high enough.</p>