Contact Information

The Fuqua School of Business
Duke University
Durham, NC 27708
udayan.vaidya@duke.edu

Fields of Specialization
Microeconomic Theory, Mechanism & Information Design, Industrial Organization

Education

Ph.D., Economics, Northwestern University, 2023
BS, Mathematics, University of Chicago, 2015

CV

Working Papers

Regulating Disclosure: The Value of Discretion [draft] [slides]

Abstract: We develop a theory of data ownership and disclosure. We consider a model in which a regulator has a single policy instrument: determining how personal data may be disclosed from a consumer to a monopolistic seller of a good. Voluntary disclosure creates a friction: the seller faces a tradeoff between incentivizing disclosure and optimally using the consumer’s data. We characterize the optimal mechanism and show that — under a decreasing marginal revenue condition — discretionary policies cannot outperform mandatory disclosure policies regardless of the regulator’s objective. Perhaps surprisingly, when this condition fails, discretion may be uniquely optimal. Finally, if the regulator can design the data itself, it is without loss to mandate full disclosure. The results suggest that discretionary policies expand the set of regulatory possibilities in specific cases, but the frictions they introduce may ultimately harm consumers.

Robust Certification Design [new draft coming soon!]

(Previously: Comparative Statics on Evidence Structures) [draft]

Abstract:  We study robust choice of certification scheme to be used in a principal-agent interaction. The certifier has access to a set of certification technologies that describe both the mapping from the agent’s value to a signal and the ways in which that signal may be (mis-)reported. A technology is dominated if there exists an alternative technology that always gives the principal a higher payoff regardless of the action space, prior beliefs, or preferences of the principal and agent. We show that a technology f is dominated if and only if it is a monotone garbling of an alternative f’. This captures two intuitive features: that f’ is more informative as a signal (garbling), and that the agent is given less discretion to misreport (monotone). The result is shown by a novel extension of Blackwell’s theorem (’53) to environments where the set of signal-contingent decision rules is restricted. As applications, we study comparative statics of a regulator’s optimal evidence structure and multi-market pricing restrictions.

Works in Progress

(NEW) Robust Contracting for Search (joint with Theo Durandard and Boli Xu) [short slides]

Robust Contracting: A Best Responses Approach [coming soon!]

“Under Review”: Mitigating Reputation Concerns with Information Design [short slides]

Abstract: A reputation-concerned agent may act in ways that do not maximize the interests of their organization in order to manipulate an external market’s perception. This belief is inferred both through the agent’s action and any subsequently revealed information about the underlying state. We study how a firm might design a review policy, modeled as a statistical experiment following the manager’s action, in order to optimally release information about the state to an external market. By employing reviews with different levels of informativeness, in equilibrium the firm can screen only high-quality managers into taking risky actions. For a range of parameters, the optimal review policy achieves the firm’s first-best payoff and completely alleviates the agency conflict.

Second Opinions and Disclosure [short slides]

Abstract: How do transparency policies affect the quality of second-opinions? We study a model in which a patient sequentially consults with two doctors before pursuing treatment. The doctors are less risk-averse than the patient and have privately-known expertise. We find that the optimal regime is non-monotone in the likelihood of doctor expertise: transparency is optimal for extreme (low and high) levels of expertise, while opacity is optimal for intermediate levels. The main tradeoff is that disclosure introduces correlation between doctor recommendations, which makes them individually less informative, but allows the decision-maker to identify the relative quality of the two doctors whenever there is an overturning of recommendation.

Teaching

Testimonials!

MGRECON 780: Managerial Economics

ECON 410-3: Ph.D. Game Theory (Alessandro Pavan)

ECON 410-1: Ph.D. Introduction to Microeconomics (Eddie Dekel)

MMSS 211-2: Game Theory (William Rogerson)

MMSS 211-1: “Turbo” Microeconomics (Eric Schulz)