This dissertation comprises three essays. The theme that unifies them is "experiments on corruption and preferences." The first essay (chapter 2) reports theory-testing experiments on the effect of yardstick competition (a form of government competition) on corruption. The second essay (chapter 3) reports theory-testing experiments on the effect of efficiency and transparency on corruption. Furthermore, this essay revisits the yardstick competition question by implementing an alternative experimental design and protocol. Finally, the third essay (chapter 4) reports a theory-testing randomized field experiment that identifies the causes and consequences of corruption. The first essay finds the following. Theoretically, the paper derives a main proposition which suggests that institutions with more noise give rise to an increase in corrupt behavior and a decrease in voter welfare. Empirically, the paper finds a few key results. First, there are an initial nontrivial proportion of good incumbents in the population. This proportion goes down as the experiment session progresses. Secondly, a large proportion of bad incumbents make theoretically inconsistent choices given the assumptions of the model. Third, overall evidence of yardstick competition is mild. Yardstick competition has little effect as a corruption-taming mechanism when the proportion of good incumbents is low. Namely, an institution that is characterized by a small number of good incumbents has little room for yardstick competition, since bad incumbents are likely to be replaced by equally bad incumbents. Thus, incumbents have less of an incentive to build a reputation. This is also the case in which (1) yardstick competition leads to non-increasing voter welfare and (2) voters are more likely to re-elect bad domestic incumbents. Finally, a partitioning of the data by gender suggests that males and females exhibit different degrees of learning depending on the payoffs they face. Furthermore, male voter behavior exhibits mild evidence of yardstick competition when voters face the pooling equilibrium payoff. The second essay finds the following. First, efficiency is an important determinant of corruption. A decrease in efficiency makes it more costly for incumbents to "do the right thing." This drives them to divert maximum rents. While voters retaliate slightly, voters tend to be worse off. Secondly, increased lack of a particular form of transparency (as defined in terms of an increase in risk in the distribution of the unit cost) leaves corrupt incumbent behavior unchanged. In particular, if the draw of the unit cost is unfavorable, incumbents tend to be less corrupt. Third, there is strong evidence of yardstick competition. On the incumbent's side, yardstick competition acts as a corruption-taming mechanism if the incumbent is female. On the voter's side, voters are less likely to re-elect the incumbent in the presence of yardstick competition. Specifically, voters pay attention to the difference between the tax signal in their own jurisdiction and that in another. As this difference increases, voters re-elect less. This gives true meaning to the concept of "benchmarking." Finally, the analysis sheds light on the role of history and beliefs on behavior. Beliefs are an important determinant of incumbents' choices. If an incumbent perceives a tax signal to be associated with a higher likelihood of re-election, he is more likely to choose it. On the voter's side, history tends to be important. In particular, voters are more likely to vote out incumbents as time progresses. This suggests that incumbents care about tax signals because they provide access to re-elections while voters use the history of taxes and re-elections in addition to current taxes to formulate their re-election decisions. Finally, the third essay finds the following. First, 19.08% of mail is lost. Secondly, money mail is more likely to be lost at a rate of 20.90% and this finding is significant at the 10% level. This finding suggests that loss of mail is systematic (non-random), which implies that this type of corruption is due to strategic behavior as opposed to plain shirking on the part of mail handlers. Third, we find that loss of mail is non-random across other observables. In particular, middle-income neighborhoods are more likely to experience lost (money) mail. Also, female heads of household in low-income neighborhoods are more likely to experience lost mail while female heads of household in high-income neighborhoods are much less likely to experience lost (money) mail. Finally, this form of corruption is costly to different stakeholders. The sender of mail bears a direct and an indirect cost. The direct cost is the value of the mail. The indirect cost is the cost of having to switch carriers once mail has been lost. Corruption is also costly to the intended mail recipient as discussed above. Finally, corruption is costly the mail company (SERPOST) in terms of lost revenue and to society in terms of loss of trust. Overall, the findings suggest that public-private partnerships need not increase efficiency by reducing corruption; particularly, when the institution remains a monopoly. Increased efficiency in mail delivery is likely to require (1) privatization and (2) competition; otherwise, the monopolist has no incentive to provide better service and loss of mail is likely to persist.

In this thesis, I examine the factors associated with analysts’ voluntary practice of issuing cash flow forecasts and earnings forecasts on the same day. I draw on Hughes and Pae’s (2004) management partial disclosure equilibrium and predict how an analyst decides to issue a cash flow forecast revision along with and according to her bad news and good news earnings forecast revision. In particular, I predict that analysts strategically choose to supplement earnings forecasts with positive cash flow news when they deliver bad news earnings forecasts. Consistent with my prediction, I find that analysts are more likely to issue cash flow forecast revisions in the opposite direction to their earnings forecast revisions when they issue downward earnings forecast revisions than when they issue upward earnings forecast revisions. The results suggest that analysts may not make their decisions to issue cash flow forecasts as objectively as they ought to do in their role as independent information intermediaries. Rather, analyst decisions to issue cash flow forecasts are akin to managers’ strategic decisions to voluntarily disclose supplemental information to affect investors’ confidence in their primary news (earnings forecasts). / Thesis (Ph.D, Management) -- Queen's University, 2009-05-27 16:20:09.248

The use of personal contacts and the role of education as a signal of the Worker's productivity are two important aspects of the job search process. The aim of this thesis is to develop a model that combines both approaches. We distinguish between random and strategic models of job information networks. In the former case the structure of the network is given, while in the latter it depends on the strategic decision of the Workers. We present a strategic model of network formation with two types of Workers who are able to signal their productivity by the level of their education. When applying for a job they have two possibilities of contacting the Employer: a direct application and an indirect application through a friend who currently works for the Employer.

Signaling games are part of games with imperfect information. The games with imperfect information mean that the player doesn't know all moves of players, which played before him. The signaling game as such are interesting because some players have more information than the others. The better informed group of players can indicate to uninformed players what they know and wait how the opponents react. Generally the move which uninformed party takes influence all players. In my papers I want to describe main rules for signaling games, show possible ways how to solve this kinds of problems and use this new knowledge in aplication on problem which can be usable in practices.

This dissertation focuses on exploring individual and strategic decision problems in Economics. I take a different approach in each chapter to capture various aspects of decision problems. An overview of this dissertation is provided in Chapter 1. Chapter 2 studies an individual's decision making in extensive-form games under ambiguity when the individual is ambiguous about an opponent's moves. In this chapter, a player follows Choquet Expected Utility preferences, since the standard Expected Utility cannot explain the situations of ambiguity. I raise the issue that dynamically inconsistent decision making can be derived in extensive-form games with ambiguity. To cope with this issue, this chapter provides sufficient conditions to recover dynamic consistency. Chapter 3 analyzes the strategic decision making in signaling games when a player makes an inference about hidden information from the behavioral hypothesis. The Hypothesis Testing Equilibrium (HTE) is proposed to provide an explanation for posterior beliefs from the player. The notion of HTE admits belief updates for all events including zero-probability events. In addition, this chapter introduces well-motivated modifications of HTE. Finally, Chapter 4 examines a boundedly rational individual who considers selective attributes when making a decision. It is assumed that the individual focuses on a subset of attributes that stand out from a choice set. The selective attributes model can accommodate violations of choice axioms of Independence from Irrelevant Alternative (IIA) and Regularity. / Doctor of Philosophy / This dissertation focuses on exploring individual and strategic decision problems in Economics. I take a different approach in each chapter to capture various aspects of decision problem. An overview of this dissertation is provided in Chapter 1. Chapter 2 studies an individual’s decision making in extensive-form games under ambiguity. Ambiguity describes the situation in which the information available to a decision maker is too imprecise to be summarized by a probability measure (Epstein, 1999). It is known that ambiguity causes dynamic inconsistency between ex-ante and interim decision making. This chapter provides sufficient conditions under which dynamic consistency is maintained. Chapter 3 analyzes the strategic decision making in signaling games in which there are two players: informed sender and uninformed receiver. The sender has a private information about his type and the receiver makes an inference about hidden information. This chapter suggests a notion of the Hypothesis Testing Equilibrium (HTE), which provides an alternative explanation for the receiver’s beliefs. The idea of the HTE can be used as a refinement of Perfect Bayesian Equilibrium (PBE) in signaling games to cope with the known limitations of PBE. Finally, Chapter 4 examines a boundedly rational individual who considers only salient attributes when making a decision. The individual considers an attribute only when it stands out enough in a choice set. The selective attribute model can accommodate violations of choice axioms of Independence from Irrelevant Alternative (IIA) and Regularity.

信用市場發生資訊不對稱時，貸款申請人對自己的型態瞭若指掌，而銀行 卻因對貸款申請人資訊相對不足而必須承受倒帳的風險。銀行若欲保障利 潤而提高擔保品或利率，反而易引起道德危機與逆選擇的問題，造成銀行 利潤下降。多數文獻常以信用分配、自我選擇機能、信號機能來探討銀行 面臨資訊不對稱所發生的狀況，本文就是以信號賽局來探討資訊不對稱下 的銀行放款決策。在以信號機能分析銀行放款市場的文獻中，Milde & Riley (1988)以貸款額為信號變數，分別用乘法與加法形式利潤函數探討 不對稱資訊下的銀行放款決策。薛舜仁(1993)則以擔保品為信號變數，運 用乘法形式利潤函數來探討。本文則延續薛舜仁的分析方法，在貸款額固 定下，利用貸款申請人型態、擔保品、計劃報酬隨機性形成利潤函數，惟 此利潤函數，呈現的是Milde & Riley 的加法形式利潤函數。透過貸款申 請人無異曲線斜率不同所隱含邊際替代率不同的特性，分析出不對稱資訊 下的均衡契約。由於本文結果與 Milde & Riley 及薛舜仁的結果不同， 所以我們將各結果列出比較，發現在資訊不對稱時，以債權安全目標設計 契約時，債信高的申請人會選擇高貸款額或低擔保品但放款利率高的契約 。當銀行為防止高風險者因擔保品負擔過重退出市場，而以風險角度設計 契約時，則均衡時，高債信者會選擇低貸款額或高擔保品，但放款利率低 的契約。

Kommunikation entsteht, ohne dass hierfür notwendigerweise semantische oder syntaktische Regeln definiert werden müssen: Irgendwann haben unsere Vorfahren erlernt, miteinander zu kommunizieren, ohne dass ihnen jemand erklärte, wie das geht. In dieser Arbeit wird der philosophischen Frage nachgegangen, wie das möglich ist. Es soll geklärt werden, welche Bedingungen im Abstrakten dafür hinreichend sind, dass Wesen miteinander zu kommunizieren erlernen, und zwar insbesondere, ohne dass man ihnen hierfür eine konkrete Sprache vorgibt. Die Arbeit baut auf neuen Modellen und Erkenntnissen aus der Signalspieltheorie auf. Diese belegen, dass selbst einfache verstärkungsbasierte Lernverfahren in bestimmten Koordinierungsproblemen selbständig erlernen können, Information miteinander auszutauschen. Diese Erkenntnisse werden in dieser Arbeit mit Techniken aus dem maschinellen Lernen, insbesondere aus dem Bereich des deep reinforcement learning, kombiniert. Hiermit soll demonstriert werden, dass rudimentär intelligente Akteure selbstständig in relativ komplexen Sprachen miteinander kommunizieren können, wenn dies einer effizienteren Lösung nicht-trivialer Koordinierungsprobleme dient. Anders als in vergleichbaren Ansätzen, werden die lernfähigen Algorithmen, die in dieser Arbeit zum Einsatz kommen, weder dazu trainiert, real existierende Sprachen zu benutzen, noch werden sie dazu programmiert, künstliche Protokollsprachen zu verwenden. Vielmehr wird ihnen lediglich eine Menge von Signalen vorgegeben. Sowohl die syntaktischen Regeln, wie diese Signale aneinandergereiht werden dürfen, als auch die Semantik der Signale entstehen von alleine. / Communication emerges without the need for explicit definitions of semantic or syntactic rules: At some point, our ancestors learned to communicate with one another without anyone explaining to them how to do that. In this work, I'll try to answer the philosophical question of how that is possible. The goal is to find abstract conditions that are sufficient for the emergence of communication between creatures that do not have any predefined language available to them. This work builds on recent models and insights from the theory of signaling games. There, it is shown that simple reinforcement learning agents are able to learn to exchange meaningful information in suitable coordination problems autonomously. These insights will be combined with more powerful deep reinforcement learning techniques. Thus, it shall be demonstrated that moderately intelligent agents can learn to communicate in relatively complex languages, if this is useful to them in sufficiently non-trivial coordination problems. In contrast to existing work on communication based on artificial intelligence, the learning algorithms that will be applied here, will neither be trained to communicate in an existing natural language, nor will they be hard coded to use a predefined protocol. Instead, they will construct their messages freely from arbitrary sets of signals. The syntactic rules according to which these elementary signals can be chained together, as well as their semantics, will emerge autonomously.