Affiliation: NYU Abu Dhabi
Education: PhD, New York University; MA, Bilkent University; BA, Bilkent University
Research Areas: Microeconomic Theory; Political Economy; Industrial Organization
My research fields are non-cooperative game theory, industrial organization, and political economy. I use non-cooperative game theory to analyze cases in which there is a conflict of interest among economic/political agents. While my research has a wide range of applications, I work with theoretical models which assume that there are generally two broad types of economic/ political agents who differ both in terms of their incentives and in what they know about the state of the world. Agents try to tilt the outcome of the game in their favor in various ways including information manipulation, signaling, and/or coordination. The broad research question I seek to address is when and how a particular type of player is more successful than others in affecting the outcome.
I am currently working on a model, where a firm releases a product, which can have either of two quality levels, high or low. Consumers do not know the quality of the product and consult various product review platforms to obtain information.
The information that product reviews provide is noisy and also manipulated by the firm. In the benchmark specification, the firm chooses to engage only in manipulative efforts, while the price of the product is fixed. In the endogenous price" specification, the firm can strategically choose both its manipulative effort and the price level.
The analysis in this paper reveals that if the price is relatively higher, the rm that produces the high-quality product exerts more manipulative effort. Correspondingly, the bias in consumers' expectations about the product quality is beneficial for consumers, since consumers prefer to buy the high-quality product.
Conversely, if the price is relatively lower, the rm that produces the low-quality product exerts more manipulative effort, and the corresponding bias in consumers' expectations is harmful for consumers. Moreover, when price is endogenous, a higher and more informative price does not reduce the level of bias in consumers' beliefs and manipulation becomes less beneficial for consumers.
This paper focuses on a monopoly setting to analyze the interaction between the fi rm and the consumers. Competitive information manipulation among many rms in an oligopoly market structure is an interesting and challenging open question in this research field that I am planning to pursue in my future research.