Research

Working Papers

• "Dynamic Coordination with Switching Costs" (with Luke Boosey), under review

Abstract: A key component to the efficient functioning of an organization is the successful coordination of activities by its constituent divisions. However, in many organizational settings, departments are initially uncertain regarding how to coordinate. Moreover, it is typically costly for a department to modify its procedures, which introduces frictions that may impede coordination. In this paper, we study dynamic coordination with costly switching, where two players search for compatible platforms. We introduce a stylized model, which predicts that players remain on their current platforms whenever their common belief is sufficiently optimistic; otherwise, they switch with increasing probability whenever they are more pessimistic about compatibility, switching is less costly, or success on compatible platforms is more likely. In an experiment, we vary (i) whether success is deterministic or stochastic when players are on compatible platforms, and (ii) the cost of switching. The data are largely consistent with comparative statics predictions, particularly in the deterministic case, although subjects tend to "under-switch" at low beliefs. Behavior is more nuanced in the stochastic setting, where learning is complicated by the fact that success is not guaranteed by compatibility.

• "Competence, Mistrust, and Information Acquisition in Advisory Relationships," in preparation

Abstract: I consider an infinite-horizon, repeated advice environment, where an adviser of privately known expertise, either competent or incompetent, recommends one of two options to a decision maker in each period. The decision maker chooses whether to “check” the adviser’s recommendation prior to implementation in every period and then, following the public outcome, either continues or terminates the relationship. When checking is too costly, termination is the only instrument used in equilibrium, resulting in inefficient termination of competent advisers. When checking is sufficiently cheap, the decision maker never terminates the relationship, but frequent (costly) checking may occur. If competent advisers receive fully informative signals, an efficient, cooperative equilibrium can be supported through the use of continual checking (for low checking costs) or termination (for high checking costs), but this is no longer possible under a partially informative signal structure. In this case, the welfare of both competent advisers and decision makers can be improved when checking is cheaper, as this enables the use of probationary phases following bad outcomes.