Information Revolutions and the Overthrow of Autocratic Regimes

This paper presents a model of information quality and political regime change. If enough citizens act against a regime, it is overthrown. Citizens are imperfectly informed about how hard this will be and the regime can, at a cost, engage in propaganda so that at face-value it seems hard. The citizens are rational and evaluate their information knowing the regime's incentives. The model makes three predictions. First, even rational citizens may not correctly infer the amount of manipulation. Second, as the intrinsic quality of information available becomes sufficiently high, the regime is more likely to survive. Third, the regime benefits from ambiguity about the amount of manipulation, and consequently, as it becomes cheaper to manipulate, the regime is also more likely to survive. Key results of the benchmark static model extend to a simple dynamic setting where there are waves of unrest

Endogenous Public Information and Welfare

This paper performs a welfare analysis of economies with private information when public information is endogenously generated and agents can condition on noisy public statistics in the rational expectations tradition. We find that equilibrium is not (restricted) efficient even when feasible allocations share similar properties to the market context (e.g., linear in information). The reason is that the market in general does not internalize the informational externality when public statistics (e.g., prices) convey information. Under strategic substitutability, equilibrium prices will tend to convey too little information when the informational role of prices prevails over its index of 'scarcity' role and too much information in the opposite case. Under strategic complementarity, prices always convey too little information. These results extend to the internal efficiency benchmark (accounting only for the collective welfare of the active players). However, received results-on the relative weights placed by agents on private and public information, when the latter is exogenous- may be overturned