S. Nageeb Ali, Navin Kartik, Andreas Kleiner
We study sequential bargaining between a proposer and a veto player. Both have single-peaked preferences, but the proposer is uncertain about the veto player's ideal point. The proposer cannot commit to future proposals. When players are patient, there can be equilibria with Coasian dynamics: the veto player's private information can largely nullify proposer's bargaining power. Our main result, however, is that under some conditions there are also equilibria in which the proposer obtains the high payoff that he would with commitment power. The driving force is that the veto player's single-peaked preferences give the proposer an option to "leapfrog", i.e., to secure agreement from only low-surplus types early on to credibly extract surplus from high types later. Methodologically, we exploit the connection between sequential bargaining and static mechanism design.
S. Nageeb Ali, Ayal Chen-Zion, Erik Lillethun
Information is replicable in that it can be simultaneously consumed and sold to others. We study how resale affects a decentralized market for information. We show that even if the initial seller is an informational monopolist, she captures non-trivial rents from at most a single buyer: her payoffs converge to 0 as soon as a single buyer has bought information. By contrast, if the seller can also sell valueless tokens, there exists a ``prepay equilibrium'' where payment is extracted from all buyers before the information good is released. By exploiting resale possibilities, this prepay equilibrium gives the seller as high a payoff as she would achieve if resale were prohibited.
S. Nageeb Ali, David A. Miller
Many markets rely on traders truthfully communicating who has cheated in the past and ostracizing those traders from future trade. This paper investigates when truthful communication is incentive compatible. We find that if each side has a myopic incentive to deviate, then communication incentives are satisfied only when the volume of trade is low. By contrast, if only one side has a myopic incentive to deviate, then communication incentives do not constrain the volume of supportable trade. Accordingly, there are strong gains from structuring trade so that one side either moves first or has its cooperation guaranteed by external enforcement.
S. Nageeb Ali, Greg Lewis, Shoshana Vasserman
Central to privacy concerns is that firms may use consumer data to price discriminate. A common policy response is that consumers should be given control over which firms access their data and how. Since firms learn about a consumer's preferences based on the data seen and the consumer's disclosure choices, the equilibrium implications of consumer control are unclear. We study whether such measures improve consumer welfare in monopolistic and competitive markets. We find that consumer control can improve consumer welfare relative to both perfect price discrimination and no personalized pricing. First, consumers can use disclosure to amplify competitive forces. Second, consumers can disclose information to induce even a monopolist to lower prices. Whether consumer control improves welfare depends on the disclosure technology and market competitiveness. Simple disclosure technologies suffice in competitive markets. When facing a monopolist, a consumer needs partial disclosure possibilities to obtain any welfare gains.
Marina Agranov, S. Nageeb Ali, B. Douglas Bernheim, Thomas R. Palfrey
Strategic models of legislative bargaining predict that proposers can extract high shares of economic surplus by identifying and exploiting weak coalition partners. However, strength and weakness can be difficult to assess even with relatively simple bargaining protocols. We evaluate experimentally how strategic complexity affects the ability to identify weak coalition partners, and for the partners themselves to determine whether their positions are weak or strong. We find that, as strategic complexity progressively obscures bargaining strength, proposers migrate to egalitarianism, in significant part because non-proposers begin placing substantial weight on fairness. Greater analytic skill dampens but does not eliminate these patterns.
S. Nageeb Ali, Ce Liu
This paper proposes a framework and solution concept for repeated coalitional behavior. We model history-dependent schemes that deter coalitions from blocking using continuation promises and punishments. We evaluate the effectiveness of these schemes across a range of settings, and apply our results to repeated matching and negotiations.
S. Nageeb Ali, Ce Liu
We show that in Greenberg (1989)'s coalitional repeated game situation, every nondiscriminating Conservative Stable Standard of Behavior is a subset of the set of Perfect Coalitional Equilibrium (Ali and Liu 2026) paths. Moreover, the set of Perfect Coalitional Equilibrium paths itself is a nondiscriminating Conservative Stable Standard of Behavior. The set of Perfect Coalitional Equilibrium paths is therefore the maximal nondiscriminating Conservative Stable Standard of Behavior.
S. Nageeb Ali, Nima Haghpanah, Xiao Lin, Ron Siegel
The seller of an asset has the option to buy hard information about the value of the asset from an intermediary. The seller can then disclose the acquired information before selling the asset in a competitive market. We study how the intermediary designs and sells hard information to robustly maximize her revenue across all equilibria. Even though the intermediary could use an accurate test that reveals the asset's value, we show that robust revenue maximization leads to a noisy test with a continuum of possible scores that are distributed exponentially. In addition, the intermediary always charges the seller for disclosing the test score to the market, but not necessarily for running the test. This enables the intermediary to robustly appropriate a significant share of the surplus resulting from the asset sale even though the information generated by the test provides no social value.
S. Nageeb Ali, Maximilian Mihm, Lucas Siga
This paper offers a strategic rationale for zero-sum thinking in elections. We show that asymmetric information and distributional considerations together make voters wary of policies supported by others. This force impels a majority of voters to support policies contrary to their preferences and information. Our analysis identifies and interprets a form of "adverse correlation" that is necessary and sufficient for zero-sum thinking to prevail in equilibrium.
S. Nageeb Ali, B. Douglas Bernheim, Alexander W. Bloedel, Silvia Console Battilana
This paper models legislative decision-making with an agenda setter who can propose policies sequentially, tailoring each proposal to the status quo that prevails after prior votes. Voters are sophisticated and the agenda setter cannot commit to her future proposals. Nevertheless, the agenda setter obtains her favorite outcome in every equilibrium regardless of the initial default policy. Central to our results is a new condition on preferences, manipulability, that holds in rich policy spaces, including spatial settings and distribution problems. Our results overturn the conventional wisdom that voter sophistication alone constrains an agenda setter's power.
S. Nageeb Ali, Andreas Kleiner, Kun Zhang
This paper studies the role of hard information in contractual and market settings in which the receiver can flexibly adjust allocations and transfers in response to the sender's disclosure. These settings include monopoly pricing, bilateral trade with interdependent values, insurance contracting, and policy negotiations. Across these settings, the sender is worst off if she reveals her type completely: if her type becomes known, the receiver can adjust the terms of trade to extract her surplus. Taking this feature as our central departure from the literature, we characterize the entire set of equilibrium payoffs across these disclosure games. We establish an equivalence result: every payoff profile that can be achieved through information design can also be approximated by an equilibrium of the disclosure game. Thus, hard information enables the sender to attain her commitment payoff without having to commit to an information structure. Moreover, this result highlights how verifiability can empower the sender in settings in which bargaining power resides with the receiver.
S. Nageeb Ali, Nicole Immorlica, Meena Jagadeesan, Brendan Lucier
In the digital economy, technological innovations make it cheaper to produce high-quality content. For example, generative AI tools reduce costs for creators who develop content to be distributed online, but can also reduce production costs for the users who consume that content. These innovations can thus lead to disintermediation, since consumers may choose to use these technologies directly, bypassing intermediaries. To investigate when technological improvements lead to disintermediation, we study a game with an intermediary, suppliers of a production technology, and consumers. First, we show disintermediation occurs whenever production costs are too high or too low. We then investigate the consequences of disintermediation for welfare and content quality at equilibrium. While the intermediary is welfare-improving, the intermediary extracts all gains to social welfare and its presence can raise or lower content quality. We further analyze how disintermediation is affected by the level of competition between suppliers and the intermediary's fee structure. More broadly, our results take a step towards assessing how production technology innovations affect the survival of intermediaries and impact the digital economy.