My name is Kun Zhang, and I am a lecturer at the School of Economics, University of Queensland. I received my Ph.D. in Economics from the W. P. Carey School of Business, Arizona State University.
I am interested in information economics (especially mechanism design, communication, and information acquisition) and its applications to industrial organization.
Research
Working Papers
From Design to Disclosure (with S. Nageeb Ali and Andreas Kleiner)
Communication PDFAbstract: This paper studies games of voluntary disclosure in which a sender discloses evidence to a receiver who then offers an allocation and transfers. We characterize the set of equilibrium payoffs in this setting. Our main result establishes that any payoff profile that can be achieved through information design can also be supported by an equilibrium of the disclosure game. Hence, our analysis suggests an equivalence between disclosure and design in these settings. We apply our results to monopoly pricing, bargaining over policies, and insurance markets.
Persuasion with Verifiable Information (with Maria Titova)
Communication PDFAbstract: This paper studies a game in which an informed sender with state-independent preferences uses verifiable messages to convince a receiver to choose an action from a finite set. We characterize the equilibrium outcomes of the game and compare them with commitment outcomes in information design. We provide conditions for a commitment outcome to be an equilibrium outcome and identify environments in which the sender does not benefit from commitment power. Our findings offer insights into the interchangeability of verifiability and commitment in applied settings.
Uncharted Waters: Selling a New Product Robustly
Mechanism DesignIO PDF SlidesAbstract: When introducing a novel product, a seller sets a price and chooses how much information to provide to a representative buyer, who may incur a search cost to discover an outside option. The buyer knows the outside option distribution, but the seller knows only its mean and the bounds of its support. Seeking ``robustness," the seller evaluates selling strategies based on their guaranteed profits. The robustly optimal strategy balances a trade-off between search deterrence and surplus extraction: providing information can dissuade the buyer from searching for alternatives and thus boost demand, but doing so requires offering the buyer a high payoff via a low price. The results help explain the large variations in information provision policies among new products, and suggest that technological advancements reducing search costs may lead to higher prices and noisier information provision, and hence harm consumers.
Costly Evidence and Discretionary Disclosure (with Mark Whitmeyer)
CommunicationInformation Acquisition PDF Supplement SlidesAbstract: A sender flexibly acquires evidence--which she may pay a third party to certify--to disclose to a receiver. When evidence acquisition is overt, the receiver observes the evidence gathering process irrespective of whether its outcome is certified. When acquisition is covert, the receiver does not. In contrast to the case with exogenous evidence, the receiver prefers a strictly positive certification cost. As acquisition costs vanish, equilibria converge to the Pareto-worst free-learning equilibrium. The receiver always prefers covert to overt evidence acquisition.
Optimal Procurement Design: A Reduced Form Approach
Mechanism DesignIO PDFAbstract: Standard procurement models assume that the buyer knows the quality of the good at the time of procurement; however, in many settings, the quality is learned only long after the transaction. We study procurement problems in which the buyer's valuation of the supplied good depends directly on its quality, which is unverifiable and unobservable to the buyer. For a broad class of procurement problems, we identify procurement mechanisms maximizing any weighted average of the buyer's expected payoff and social surplus. The optimal mechanism can be implemented by an auction that restricts sellers to submit bids within specific intervals.
Buying Opinions (with Mark Whitmeyer)
Moral HazardInformation Acquisition PDF Supplement Slides Talk RecordingAbstract: A principal hires an agent to acquire soft information about an unknown state. Even though neither how the agent learns nor what the agent discovers are contractible, we show the principal is unconstrained as to what information the agent can be induced to acquire and report honestly. When the agent is risk neutral, and a) is not asked to learn too much, b) can acquire information sufficiently cheaply, or c) can face sufficiently large penalties, the principal can attain the first-best outcome. We discuss the effect of risk aversion (on the part of the agent) and characterize the second-best contracts.
Research Notes
Redeeming Falsifiability? (with Mark Whitmeyer)
Expert TestingInformation Acquisition PDFAbstract: We revisit Popper's falsifiability criterion. A tester hires a potential expert to produce a theory, offering payments contingent on the observed performance of the theory. We argue that if the informed expert can acquire additional information, falsifiability does have the power to identify worthless theories.
