Abstract: This paper studies how strategic information disclosure can consistently lead rational agents to abandon their initially correct model of the world in favor of a misspecified one. We study a dynamic game between a biased sender and an agent. Over an infinite horizon, the agent chooses between two "bandit arms" — representing alternative policies, projects, etc. — with uncertain success rates, while the sender discloses verifiable information to sway the agent towards the sender’s preferred (inferior) arm. The agent initially assumes that the sender is biased but also entertains an alternative (incorrect) model where the sender is unbiased. The agent updates their beliefs and switches models when the Bayes Factor is sufficiently high. We show how the sender can successfully mislead the agent and convince them to choose the sender-preferred arm in the long run. Moreover, we characterize when the sender can achieve this outcome with certainty.

Abstract: Power and resources have been concentrating within major nations around the world, echoing a century-old prediction in political economy that remains a longstanding empirical puzzle with renewed urgency. I develop an economic model of how a society's distribution of power and resources evolves over time. Multiple lineages of players compete by accumulating power, which is modeled as an asset that increases one's probability of winning conflicts over resources. This model provides sharp equilibrium predictions for how a society’s distribution of power evolves and whether it approaches equality, oligarchy, or dictatorship in the long run. My main result shows that power and resources generically fall into the hands of a few when political competition is left unchecked in large societies, suggesting that today’s trends are no anomaly and will not self-correct.

Online voting mechanisms (e.g. polls) are a potentially powerful, cost-effective means of collecting large amounts of data about preferences, but such large-scale data collection has proven to be vulnerable to sabotage (e.g. by internet trolls) if proper precautions are not taken. To this end, we consider the problem of designing a voting mechanism that is robust to derailment by external groups. We show that plurality voting and other standard mechanisms are often not robust to sabotage; in fact it is sometimes preferable to not run any poll at all. The optimal voting mechanism is found to make saboteurs indifferent between each alternative they can vote for, since this undermines their ability to adversely affect the designer's predictions of other voters' preferences.    

We develop and estimate a dynamic model of financial-market learning in which traders can endogenously switch between correct and misspecified models. Unlike frameworks that impose behavioral biases exogenously, our traders rationally choose to deviate from the correct model when short-term gains outweigh informational accuracy - a mechanism we term greed-driven model choice. This switching behavior generates persistent wedges between subjective and objective beliefs, producing volatility smiles, return predictability, and pricing-kernel distortions as equilibrium outcomes. Using option-price data and a structurally estimated binomial tree model with path dependence and informed traders, we identify belief-switching thresholds that quantify how greed and fear jointly shape learning and risk premia. We document economically significant welfare and performance costs of misspecification, expressed in certainty-equivalent losses and Sharpe-ratio reductions. Our results reveal how heterogeneous information processing and learning frictions jointly shape equilibrium pricing kernels, offering new empirical evidence on misspecified learning in dynamic models and the behavioral foundations of rational asset pricing.

I study how a sender can use verifiable binary evidence to influence a receiver about a binary state when the relevance of information is ex ante uncertain and asymmetrically known by the sender. The sender has access to two pieces of evidence: one they know to be perfectly informative of the state and one that is completely uninformative. Although full disclosure of evidence is possible in equilibrium, the receiver generically cannot fully unravel which piece of evidence is relevant. Consequently, the Receiver may gain little to no information about the state even when all evidence is disclosed.