Junjie Zhou

Key Leaders in Social Networks

This paper examines optimal targeting and sequencing strategies in the setup proposed by Ballester et al. [3]. The setup features payoff externalities and strategic complementarity among players, who non-cooperatively determine their contributions. We first analyze a two-stage game in which players in the leader group make contributions before the follower group. We construct an exact index to identify the (single) key leader, and demonstrate that the key leader can differ substantially from the key player who most influences the network in the simultaneous-move game. Using Taylor expansions on the strength of network effects, we establish an isomorphism between the optimal leader group selection (targeting) strategy and the classical weighted maximum-cut problem. This approach leads to some design principles for unweighted complete graphs and bipartite graphs.

Information Disclosure in Contests: A Bayesian Persuasion Approach

We examine optimal information disclosure through Bayesian persuasion in a two-player contest. One contestants valuation is commonly known and the others is his private information. The contest organiser can precommit to a signal to in uence the uninformed contestants belief about the informed contestant. We show that to search for the optimal signal when the informed contestants valuation follows a binary distribution, it is without loss of generality to compare no disclosure with full disclosure; otherwise, such a restriction causes loss of generality. We propose a simple method to compute the optimal signal, which yields explicit solutions in some situations.

Economics of leadership and hierarchy

This paper explores leadership within hierarchical organizations. For each hierarchy, I consider a dynamic signaling game in which each player observes only the actions of his direct superiors before choosing his action. At the top of the hierarchy are the leaders, who learn the state from nature. The hierarchy controls the flow of information and the timing of the game, and determines the equilibrium output and welfare. I show that the welfare-optimal hierarchy is the chain, because it maximizes the incentive of players to “lead by example” for their subordinates. The chain remains optimal even in the presence of verifiable or unverifiable costly information acquisition by the leaders.

Technical Note—Optimal Pricing with Sequential Consumption in Networks

In this paper, we consider a model with a monopoly firm who sells social goods sequentially to a group of customers in a network. We show that, with symmetric social interactions, the optimal prici...

Blackwell's informativeness ranking with uncertainty-averse preferences

Blackwell (1951, 1953) proposes an informativeness ranking of experiments: experiment I is more Blackwell-informative than experiment II if and only if the value of experiment I is higher than that of experiment II for all expected-utility maximizers. Under commitment and reduction, our main theorem shows that Blackwell equivalence holds for all convex and strongly monotone preferences—i.e., uncertainty-averse preferences (Cerreia-Vioglio et al., 2011b), which nest most ambiguity-averse preferences commonly used in applications as special cases.