Marco Ottaviani

Learn More
This paper studies a model of strategic communication by an informed and upwardly biased sender to one or more receivers. Applications include situations in which (i) it is costly for the sender to misrepresent information, due to legal, technological, or moral constraints, or (ii) receivers may be credulous and blindly believe the sender’s recommendation.(More)
P rediction markets are forums for trading contracts that yield payments based on the outcome of uncertain events. There is mounting evidence that such markets can help to produce forecasts of event outcomes with a lower prediction error than conventional forecasting methods. For example, prediction market prices can be used to increase the accuracy of(More)
Security analysts tend to bias stock recommendations upwards, particularly if they are affiliated with the underwriter. We analyze whether and why investors fail to account for such distortions. Using the NYSE Trades and Quotations database, we find that large traders correct for the upward bias and exert positive abnormal trade reaction to strong buy(More)
In an influential paper, David S. Scharfstein and Jeremy C. Stein (1990) modeled sequential investment by agents concerned about their reputation as good forecasters. Consider an agent who acts after observing the behavior of another ex-ante identical agent. Scharfstein and Stein argue that reputational herding requires that better agents have more(More)
This paper analyzes the implications of the inherent con‡ict between two tasks performed by direct marketing agents: prospecting for customers and advising on the product’s “suitability” for the speci…c needs of customers. When structuring salesforce compensation, …rms trade o¤ the expected losses from “misselling”unsuitable products with the agency costs(More)
This paper studies equilibrium behavior in a class of games that models asymmetric competitions with unconditional and conditional investments. Such competitions include lobbying settings, labor-market tournaments, and R&D races, among others. I provide an algorithm that constructs the unique equilibrium in these games, and apply it to study competitions in(More)
Five Open Questions About Prediction Markets Interest in prediction markets has increased in the last decade, driven in part by the hope that these markets will prove to be valuable tools in forecasting, decision-making and risk management – in both the public and private sectors. This paper outlines five open questions in the literature, and we argue that(More)
Training and Union Wages This paper tests the hypothesis that unions, through imposing wage floors that lead to wage compression, increase on-the-job training. Our analysis focuses on Germany which provides an interesting context to test this hypothesis, due to its large scale apprenticeship programme and its collective bargaining system that is based on(More)
We introduce the possibility that the receiver naively believes the sender’s message in a game of information transmission with partially aligned objectives. We characterize an equilibrium in which the communication language is inflated, the action taken is biased, and the information transmitted is more precise than in the benchmark fully-strategic model.(More)
In the framework of a first-price private-value auction, we study the seller as a player in a game with the buyers in which he has private information about their realized valuations. We find that depending upon his information, set of signals, and commitment power he may strategically transmit messages to buyers in order to increase his revenue. In an(More)