Macroeconomics

We study the role of commitment in communication and its interactions with rules, which determine whether information is verifiable. Our framework nests models of cheap talk, information disclosure, and Bayesian persuasion. It predicts that commitment has opposite effects on information transmission under the two alternative rules. We leverage these contrasting forces to experimentally establish that subjects react to commitment in line with the main qualitative implications of the theory. Quantitatively, not all subjects behave as predicted.

To get back in balance, allocators have a number of options — everything from using secondary markets and making valuations more realistic to doing nothing. 

This should be the golden age of demand research. Many of the constraints of the past have relaxed when it comes to data collection. Yet the methodologies of demand analysis created by thought leaders such as Lester Taylor (1972, 1974; Houthakker and Taylor 2010) have not grown at the same pace and are holding back our understanding and power of prediction. Demand research is, of course, highly important. On the macro-level, governments and businesses need to know what to expect by way of aggregate or sectorial demand, such as for housing or energy.