Robust Deviations from Signaling Equilibria

In Sender-Receiver games with costly signaling, some equilibria are vulnerable to deviations which could be "unambiguously" interpreted by the Receiver as coming from a unique set of possible Sender-types. The vulnerability occurs when the types in this set are the ones who gain from the deviation, regardless of the posterior beliefs the Receiver forms over that set. We formalize this idea and use it to characterize a unique equilibrium outcome in two classes of games. First, in mono- tonic signaling games, only the Riley outcome is immune to this sort of deviation. Our result therefore provides a plausible story behind the selection made by Cho and Kreps' (1987) D1 criterion on this class of games. Second, we examine a version of Crawford and Sobel's (1982) model but with costly signaling and finite type sets, where standard refinements have no effect. We show that only a Riley-like separating equilibrium is immune to these deviations.Signaling games, Sender-Receiver, robust equilibrium, re¯nements.

The Price of Advice

We develop a model of consulting (advising) where the role of the consultant is that she can reveal signals to her client which refine the client’s original private estimate of the profitability of a project. Importantly, only the client can observe or evaluate these signals, the consultant cannot. We characterize the optimal contract between the consultant and her client. It is a menu consisting of pairs of transfers specifying payments between the two parties (from the client to the consultant or vice versa) in case the project is undertaken by the client and in case it is not. The main result of the paper is that in the optimal mechanism, the consultant obtains the same profit as if she could evaluate the impact of the signals (whose release she controls) on the client’s profit estimate.Mechanism Design, Information Disclosure, Consulting, Advising

Precautionary Bidding: First Price Auctions with Stochastic Private Values

We analyse a first-price auction where risk-averse bidders bid for an object whose value is risky. Using a private values setting, we provide the first analysis of the pure comparative statics of risk in auctions. We show that as risk increases, decreasingly risk-averse bidders will reduce their bids by more than the risk premium. Ceteris paribus, bidders will be better off bidding for a more risky object. This effect arises because as risk increases, so does the expected marginal utility of income, so bidders are reluctant to bid so highly. Even in the presence of this effect, the expected revenue of a first price auction remains higher than that of a second price auction. We show how this result extends to common values.

Human rights enforcement by people living in poverty: access to justice in Nigeria

This article analyses the challenges facing those living in poverty in Nigeria in accessing justice for the enforcement of their rights, despite those rights being constitutionally protected and despite the existence of a specific procedure for their enforcement. People living in poverty are generally most likely to see their human rights violated, and least likely to enforce their rights. The article posits that the judiciary in developing countries has a crucial role to play in fighting human rights violations specifically affecting people living in poverty, and notes the great challenge for the Nigerian legislator and judiciary towards making justice accessible in practical terms to the needy in Nigeria. The example of public interest litigation in India can serve as a source of inspiration in this respect