Navin Kartik Publications

US colleges often justify test-optional admissions policies as promoting diversity by reducing their reliance on standardized test scores. But a college that mandates test scores can decide how to use those scores. Wouldn't more information allow a college to make decisions it prefers? Indeed, this paper identifies a broad set of assumptions under which test-mandatory policies are always weakly better for colleges. We then discuss how alternative assumptions might rationalize test-optional policies.

An agent’s preferences depend on an ordered parameter or type. We characterize the set of utility functions with single-crossing differences (SCD) in convex environments. These include preferences over lotteries, both in expected utility and rank-dependent utility frameworks, and preferences over bundles of goods and over consumption streams. Our notion of SCD does not presume an order on the choice space. This unordered SCD is necessary and sufficient for “interval choice” comparative statics. We present applications to cheap talk, observational learning, and collective choice, showing how convex environments arise in these problems and how SCD/interval choice are useful. Methodologically, our main characterization stems from a result on linear aggregations of single-crossing functions.

When does society eventually learn the truth, or take the correct action, via observational learning? In a general model of sequential learning over social networks, we identify a simple condition for learning dubbed excludability. Excludability is a joint property of agents' preferences and their information. We develop two classes of preferences and information that jointly satisfy excludability: (i) for a one-dimensional state, preferences with single-crossing differences and a new informational condition, directionally unbounded beliefs; and (ii) for a multi-dimensional state, intermediate preferences and subexponential location-shift information. These applications exemplify that with multiple states, “unbounded beliefs” is not only unnecessary for learning, but incompatible with familiar informational structures like normal information. Unbounded beliefs demands that a single agent can identify the correct action. Excludability, on the other hand, only requires that a single agent must be able to displace any wrong action, even if she cannot take the correct action.

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 also are 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,” that is, 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.

A proposer requires a veto player’s approval to change a status quo. Proposer is uncertain about Vetoer’s preferences. We show that Vetoer is typically given a non-singleton menu, or delegation set, of options to pick from. The optimal set balances the extent of compromise with the risk of a veto. We identify conditions for certain delegation sets to emerge, including “full delegation”: Vetoer can choose any action between the status quo and Proposer’s ideal action. By contrast to expertise-based delegation, Proposer gives less discretion to Vetoer when their preferences are more (likely to be) aligned.

Data-based decision making must account for the manipulation of data by agents who are aware of how decisions are being made and want to affect their allocations. We study a framework in which, due to such manipulation, data become less informative when decisions depend more strongly on data. We formalize why and how a decision maker should commit to underutilizing data. Doing so attenuates information loss and thereby improves allocation accuracy.

We develop a result on expected posteriors for Bayesians with heterogenous priors, dubbed information validates the prior (IVP). Under familiar ordering requirements, Anne expects a (Blackwell) more informative experiment to bring Bob’s posterior mean closer to Anne’s prior mean. We apply the result in two contexts of games of asymmetric information: voluntary testing or certification, and costly signaling or falsification. IVP can be used to determine how an agent’s behavior responds to additional exogenous or endogenous information. We discuss economic implications.

We study a model of signaling in which agents are heterogeneous on two dimensions. An agent’s natural action is the action taken in the absence of signaling concerns. Her gaming ability parameterizes the cost of increasing the action. Equilibrium behavior muddles information across dimensions. As incentives to take higher actions increase—due to higher stakes or more manipulable signaling technology—more information is revealed about gaming ability, and less about natural actions. We explore a new externality: showing agents’ actions to additional observers can worsen information for existing observers. Applications to credit scoring, school testing, and web searching are discussed.

We study dynamic models of electoral accountability. Politicians’ policy preferences are their private information, so officeholders act to influence the electorate’s beliefs—ie, to build reputation—and improve their re-election prospects. The resulting behavior may be socially desirable (good reputation effects) or undesirable (bad reputation effects). When newly-elected officeholders face stronger reputation pressures than their established counterparts, good reputation effects give rise to incumbency disadvantage while bad reputation effects induce incumbency advantage, all else equal. We relate these results to empirical patterns on incumbency effects across democracies.

This paper concerns electoral accountability and incumbency effects. In democracies, voters delegate policy decisions to elected politicians. Such delegation poses challenges, however, as there is no formal contract governing what decisions an officeholder takes (there is moral hazard), and officeholders may have their own policy preferences that only they know (there is adverse selection). The primary instrument that voters can use to control officeholders—to hold them accountable for their actions—is the decision of re-election. We study how re-election concerns shape incumbents’ behavior and the consequences for voters’ retention decisions.

Why do office-motivated politicians sometimes espouse views that are non-congruent with their electorate’s? Can non-congruent statements convey any information about what a politician will do if elected, and if so, why would voters elect a politician who makes such statements? Furthermore, can electoral campaigns also directly affect an elected official’s behaviour? We develop a model of credible “cheap talk”—costless and non-binding communication—in elections. The foundation is an endogenous voter preference for a politician who is known to be non-congruent over one whose congruence is sufficiently uncertain. This preference arises because uncertainty about an elected official’s policy preferences generates policymaking distortions due to reputation/career concerns. We show that cheap talk can alter the electorate’s beliefs about a politician’s policy preferences and thereby affect the elected official’s behaviour. Informative cheap talk can increase or decrease voter welfare, with a greater scope for welfare benefits when reputation concerns are more important.

How much information should a central bank (CB) have about (i) policy objectives and (ii) operational shocks to the effect of monetary policy? We consider a version of the Barro–Gordon credibility problem in which monetary policy signals an inflation‐biased CB's private information on both these dimensions. We find that greater CB competence—more private information—about policy objectives is desirable while greater competence about operational shocks need not be. When the CB has less private information about operational shocks, the public infers that monetary policy depends more on the CB's information about objectives. Inflation expectations become more responsive to monetary policy, which mitigates the CB's temptation to produce surprise inflation.

How much do people lie, and how much do people trust communication when lying is possible? An important step toward answering these questions is understanding how communication is interpreted. This paper establishes in a canonical experiment that competition can alter the shared communication code: the commonly understood meaning of messages. We study a sender–receiver game in which the sender dictates how to share $10 with the receiver, if the receiver participates. The receiver has an outside option and decides whether to participate after receiving a nonbinding offer from the sender. Competition for play between senders leads to higher offers but has no effect on actual transfers, expected transfers, or receivers’ willingness to play. The higher offers signal that sharing will be equitable without the expectation that they should be followed literally: Under competition “6 is the new 5.”

We introduce a Downsian model in which policy‐relevant information is revealed to the elected politician after the election. The electorate benefits from giving the elected politician discretion to adapt policies to his information. But limits on discretion are desirable when politicians do not share the electorate's policy preferences. Optimal political representation generally consists of a mixture of the delegate (no discretion) and trustee (full discretion) models. Ambiguous electoral platforms are essential for achieving beneficial representation. Nevertheless, electoral competition does not ensure optimal representation: The winning candidate's platform is generally overly ambiguous. While our theory rationalizes a positive correlation between ambiguity and electoral success, it shows that the relationship need not be causal.

We study contests for innovation with learning about the innovation’s feasibility and opponents’ outcomes. We characterize contests that maximize innovation when the designer chooses a prize-sharing scheme and a disclosure policy. A “public winner-takes-all” contest dominates public contests—where any success is immediately disclosed—with any other prize-sharing scheme as well as winner-takes-all contests with any other disclosure policy. Yet, jointly modifying prize sharing and disclosure can increase innovation. In a broad class of mechanisms, it is optimal to share the prize with disclosure following a certain number of successes; under simple conditions, a “hidden equal-sharing” contest is optimal.

We study a persuasion game in which biased—possibly opposed—experts strategically acquire costly information that they can then conceal or reveal. We show that information acquisition decisions are strategic substitutes when experts have linear preferences over a decision maker's beliefs. The logic turns on how each expert expects the decision maker's posterior to be affected by the presence of other experts should he not acquire information that would turn out to be favorable. The decision maker may prefer to solicit advice from just one biased expert even when others—including those biased in the opposite direction (singular)—are available.