Kun Zhang

CV

Bio

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 study 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
PDF Abstract: 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
PDF Abstract: 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 Slides Abstract: A seller introduces a novel product to an unfamiliar market. The seller sets a price and chooses how much information to provide about the product to a representative buyer, who may incur a search cost to discover an outside option. The buyer knows her outside option distribution, but the seller knows only its mean and an upper bound on its support. The seller seeks "robustness" by evaluating any selling strategy based on its guaranteed profit. The robustly optimal strategy balances the trade-off between demand and surplus extraction: providing information can boost demand by deterring the buyer's search, but doing so requires offering her a high payoff through a low price. I find that providing full information is optimal when the search cost is high, and various kinds of partial information provision policies become optimal at lower search costs. Moreover, the price does not change monotonically in the search cost. These results shed light on the large variations in information provision policies among new products and suggest that technological advancements reducing search costs may lead to higher prices and make information provision noisier.

Costly Evidence and Discretionary Disclosure (with Mark Whitmeyer) CommunicationInformation Acquisition
PDF Supplement Slides Abstract: 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
PDF Abstract: 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 Recording Abstract: 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.

Conference Proceedings

Withholding Verifiable Information Communication

EC '23: Proceedings of the 24th ACM Conference on Economics and Computation

Extended Abstract Talk Recording Abstract: I study a class of finite-action disclosure games where the sender's preferences are state independent and the receiver's optimal action depends solely on the expected state. In such games, the receiver's preferred equilibria feature full revelation of the state, but other equilibria are less well-understood. I show that a sender's preferred equilibrium balances inducing sender-favorable actions and deterring deviations by pooling nonadjacent states in a particular way. Leveraging this observation, I characterize other equilibria of the game and the sender's equilibrium payoff set, and identify conditions under which the sender does not benefit from commitment power. I apply these insights to study influencing voters and selling with quality disclosure.

Research Notes

Redeeming Falsifiability? (with Mark Whitmeyer) Expert TestingInformation Acquisition
PDF Abstract: 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.