Christian Baker

Research

Economies and Diseconomies of Scale in the Cost of Information (Revise and Resubmit at Theoretical Economics)

I present a theory of information acquisition that explores the notion of economies and diseconomies of scale. I formulate a reduced-form cost function that generalizes the constant marginal cost function in Pomatto et al. (2023). I demonstrate how to apply our cost function to decision problems. While economies of scale will push a decision maker toward a balanced learning strategy, diseconomies of scale will encourage a decision maker to focus her attention on a limited number of states.

Working Papers

Information Acquisition With Weighted Voting

We examine mechanism design for governance structures in which the rewards from a correct decision are unequally shared between stakeholders. Putting more weight on the votes of those with a larger stake may increase efficiency, by providing incentives to acquire more accurate information. However, this weight should not always be proportional to stakes, as this can drown out the information from others’ votes and decrease their incentive to acquire information.

Signaling via Research

Firms hire researchers of unknown type in a competitive job market.  Researchers are able to signal their type via the choice of a costly experiment. Unlike standard signaling scenarios, researchers face a problem of information design rather than optimal effort. While the realized information of the experiment is observable, the experimental process is not.  I show that this can limit the informativeness of the equilibrium research: if the equilibrium research experiments are asymmetric, then there always exists an equilibrium with observable experiments that is more informative.

Other Papers

Cheap Talk with Costly Outside Information

I study a model of cheap talk in which a receiver (agent), after having received a message from a sender (principal), may endogenously acquire additional information by paying an entropy cost.  Using tools from the Bayesian persuasion and rational inattention literature, I examine the structure of the receiver’s learning strategy and how this influences that ability of the sender to engage in persuasive communication.  While low cost information will benefit the receiver, I find that for intermediate cost levels it can benefit the receiver to be able to commit ex ante to not engage in learning.