Essays on Dynamic Games of Incomplete Information

This dissertation consists of three essays that study the dynamic games with incomplete information. In the first chapter, I study a dynamic trading game where a seller and potential buyers start out symmetrically uninformed about the quality of a good, but the seller becomes informed about the quality, so that the asymmetric information between the agents increases over time. The introduction of a widening information gap results in several new phenomena. In particular, the interaction between screening and learning generates nonmonotonic price and trading patterns, contrary to the standard models in which asymmetric information is initially given. If the seller\u27s effective learning speed is high, the equilibrium features collapse-and-recovery behavior: Both the equilibrium price and the probability of a trade drop at a threshold time and then increase later. The seller\u27s payoff is nonmonotonic in his learning speed, as a slower learning speed can lead to higher payoff for the seller. In the second chapter, I study a dynamic one-sided-offer bargaining model between a seller and a buyer under incomplete information. The seller knows the quality of his product while the buyer does not. During bargaining, the seller randomly receives an outside option, the value of which depends on the hidden quality. If the outside option is sufficiently important, there is an equilibrium in which the uninformed buyer fails to learn the quality and continues to make the same randomized offer throughout the bargaining process. As a result, the equilibrium behavior produces an outcome path that resembles the outcome of a bargaining deadlock and its resolution. The equilibrium with deadlock has inefficient outcomes such as a delay in reaching an agreement and a breakdown in negotiations. Bargaining inefficiencies do not vanish even with frequent offers, and they may exist when there is no static adverse selection problem. In the third chapter, I address the following question: when does an incumbent party have an incentive to experiment with a risky reform policy in the presence of future elections? I study a continuous-time game between two political parties with heterogeneous preferences and a median voter. I show that while infrequent elections are surely bad for the median voter, too frequent elections can also make him strictly worse off. When the election frequency is low, a standard agency problem arises and the incumbent party experiments with its preferred reform policy even if its outlook is not promising. On the other hand, when the election frequency is too high, in equilibrium the incumbent stops experimentation too early because the imminent election increases the incumbent\u27s potential loss of power if it undertakes risky reform. The degree of inefficiency is large enough that too frequent elections are worse for the median voter than a dictatorship

Dynamic trading with developing adverse selection

We study a dynamic trading game in which the information asymmetry between the agents develops over time. A seller and potential buyers start out symmetrically uninformed about the quality of a good, but the seller becomes informed after the game begins. We show that this developing adverse selection gives rise to novel trading dynamics. In particular, if the seller's learning speed is high, the equilibrium features “collapse-and-recovery” behavior: Both the equilibrium price and the trade probability first drop and then increase over time. While the trade surplus monotonically decreases as the learning speed increases, the seller's surplus may change non-monotonically

Personal power dynamics in bargaining

We study bargaining between a fixed agenda-setter and responder over successive issues. If the responder rejects the setter's proposal, the setter can attempt to assert her will to implement her ideal and will succeed with a probability that depends on her "personal power". Players learn about the setter's power as gridlock persists. Gridlock occurs when the setter's perceived power is either too high or too low, and the players reach compromise when the setter has moderate personal power. The presence of "difficult" issues can induce more compromise as the players have incentives to avoid testing the setter's power.(c) 2022 Elsevier Inc. All rights reserved.N

Laser Acceleration of Highly Energetic Carbon Ions Using a Double-Layer Target Composed of Slightly Underdense Plasma and Ultrathin Foil

We report the experimental generation of highly energetic carbon ions up to 48 MeV per nucleon by shooting double-layer targets composed of well-controlled slightly underdense plasma (SUP) and ultrathin foils with ultra-intense femtosecond laser pulses. Particle-in-cell simulations reveal that carbon ions residing in the ultrathin foils undergo radiation pressure acceleration and long-time sheath field acceleration in sequence due to the existence of the SUP in front of the foils. Such an acceleration scheme is especially suited for heavy ion acceleration with femtosecond laser pulses. The breakthrough of heavy ion energy up to multi-tens of MeV/u at high-repetition-rate would be able to trigger significant advances in nuclear physics, high energy density physics, and medical physics