Collective Behavior with Information Asymmetry

Zhi Cao (zhicao@link.cuhk.edu.hk), Arthur Lewbel, Wenchao Li (wenchaoli.1022@gmail.com) and Junjian Yi
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Zhi Cao: Chinese University of Hong Kong
Wenchao Li: Tongji University

No 1070, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: We propose a new method for identifying bargaining power in collective house- hold models, based on information asymmetry. Our model allows household members to exploit an information advantage for bargaining. We formulate the household’s decision process under partial information disclosure using a Bayesian persuasion framework. We use this structure to point identify utility and bargaining power, which would not be identified under symmetric information. We illustrate these results by showing that our model can ex- plain known empirical outcomes regarding child educational investment and development in Chinese households where one parent is a migrant.

Keywords: Collective model; Information asymmetry; Bargaining power; Bayesian persuasion; Left-behind children (search for similar items in EconPapers)
JEL-codes: D11 D13 D82 J13 (search for similar items in EconPapers)
Date: 2024-04-26, Revised 2024-08-31
New Economics Papers: this item is included in nep-cdm, nep-gth and nep-upt
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