UC San Diego

Information has strategic value in most economic environments because individuals have private information relevant to the decisions of others. The performance of economic institutions therefore depends on the extent to which they efficiently lead agents to reveal their information. My dissertation consists of three essays on information revelation (and aggregation) in two types of institutions: exchange environments in which traders have private information regarding a good whose value is commonly known to be the same for all ex post, as in common-value auctions, and decentralized provision of public goods. The first essay analyzes double auctions designed to model prediction markets. I identify conditions under which the equilibrium price in the model fully reveals the asset's value. The second essay deals with the lack of liquidity in trade institutions when agents have common values and are perfectly strategic. In the third essay, I look at the extent to which private information restricts the set of implicit agreements to provide public services over time that can be supported via the folk theorem with complete information