Hang Lung Center for Real Estate
NBER Working Papers and Publications
|June 1999||Conflicts and Common Interests in Committees|
with Sherwin Rosen, Wing Suen: w7158
Committees improve decisions by pooling independent information of members, but promote manipulation, obfuscation, and exaggeration of private evidence when members have conflicting preferences. We study how self-interest mediates these conflicting forces. When members' preferences differ, no person ever submits a report that allows perfect inference of his private information. Instead, equilibrium strategies are many-to-one mappings that transform continuous data into ordered ranks: voting procedures are the equilibrium methods of achieving a consensus in committees. Voting necessarily coarsens the transmission of information among members, but is necessary to control conflicts of interest. The degree of coarseness of the equilibrium voting procedure is determined by the extent of confli...
Published: Li, Hao, Sherwin Rosen and Wing Suen. "Conflicts And Common Interests In Committees," American Economic Review, 2001, v91(5,Dec), 1478-1497. citation courtesy of
|August 1996||Unraveling in Assignment Markets|
with Shewin Rosen: w5729
We present a two-period model of the assignment market with uncertainty in the first period regarding productive characteristics of participants. This model is used to understand incentives toward early contracts or unraveling in labor markets for entry-level professionals. We study two contractual situations, one where firms are bound by ex post unsuccessful early contracts, and the other where they can buy out of unsuccessful early contracts. The economic benefit of unraveling is to provide insurance in the absence of complete markets, but it can come at the cost of inefficient assignments. Without reentry, unraveling need not occur. It is more likely, the smaller the applicant pool or the proportion of more promising applicants in the pool, and the greater the degree of heterogeneit...
Published: American Economic Review, Vol. 88 (June 1998): 371-387.