Research

Dangerous Talk (JMP)

Abstract: I explore continuous-time partnerships of coworker pairs in an organization. Each has a productivity-irrelevant hidden type, either normative or rogue. As the partnership proceeds, exogenous public signals gradually reveal their types to each other. Meanwhile, the organization both incentivizes calling out rogue types, and punishes false accusations. Opportunities to exit the partnership or make an accusation periodically arrive randomly, and are privately observed — thus making the partnership’s very survival an endogenous source of information. A symmetric Markov equilibrium exists, and both types are sometimes called out if stakes are high enough.

I fully solve for the unique equilibrium with one-sided incomplete information (say, an outsider entering a purely normative organization), and show how false accusations and productive losses respond to organizational incentives. In the general case with two-sided incomplete information, the equilibrium is unique when exit opportunities are sufficiently rare. Here, I solve the model numerically, and find that the earlier comparative statics predictions are robust.

This analysis sheds light on past witch hunts such as during the Red Scare or the Lavender Scare of the 1950s.

Silent Majorities

Abstract: People often keep quiet when they expect their views to be unpopular. I study a dynamic model in which agents with private positions on a controversial topic choose between voicing an opinion and staying silent. Speakers balance their true views against conformity to a social consensus, which they learn about only through a noisy public signal of past opinions. Uncertainty about the consensus itself deters expression: when it is large enough, no one speaks. Because the signal aggregates only voiced opinions, the learned consensus is biased toward those willing to speak, giving rise to silent majorities whose views are underrepresented in public discourse.

Why Sell Loot Boxes? (with T. Fung Ngai)

Abstract: A monopolist sells an indivisible good to risk-averse consumers with unit demand who share a common valuation but differ in wealth. By selling a lottery that delivers the good stochastically, the firm effectively makes the good divisible. When consumers can purchase the lottery repeatedly, they optimally choose their number of attempts and hence their overall probability of receiving the good. Richer consumers choose more attempts, so the repeated lottery screens consumers by wealth and can generate more revenue than does a posted price. This repeated lottery is nevertheless dominated by a menu of one-shot lotteries. We show that selling bundles of a virtual currency that consumers then spend on lotteries closes the gap, rationalizing why this selling scheme is prevalent in video games.