Strategic Sample Selection

49 Pages Posted: 11 Aug 2017 Last revised: 24 Mar 2020

See all articles by Alfredo Di Tillio

Alfredo Di Tillio

Bocconi University - Department of Economics

Marco Ottaviani

Bocconi University - Department of Economics

Peter Norman Sorensen

University of Copenhagen - Department of Economics

Date Written: August 2017

Abstract

This paper develops a notion of multivariate accuracy to characterize the welfare impact of sample selection from a larger presample. Maximal selection benefits or hurts a decision maker with interval dominance ordered preferences if the reverse hazard rate of the data distribution is log-supermodular-as in location experiments with normal noise-or log-submodular. Applying the result to auctions, we show that under non-pathological conditions the information contained in the winning bids decreases as the number of bidders increases. Exploiting a connection to extreme value theory, we quantify the limit amount of information when the presample size goes to infinity, as under perfect competition. In the context of a model of equilibrium persuasion with costly information, we also derive implications for the design of selected experiments when selection is made by an examinee, a biased researcher, or contending sides with the peremptory challenge right to eliminate a number of jurors.

Keywords: Comparison of experiments, Dispersion, Persuasion, Strategic selection, welfare

JEL Classification: C72, C90, D82, D83

Suggested Citation

Di Tillio, Alfredo and Ottaviani, Marco and Sorensen, Peter Norman, Strategic Sample Selection (August 2017). CEPR Discussion Paper No. DP12202, Available at SSRN: https://ssrn.com/abstract=3016789

Alfredo Di Tillio (Contact Author)

Bocconi University - Department of Economics ( email )

Milan
Italy

HOME PAGE: http://mypage.unibocconi.eu/alfredoditillio

Marco Ottaviani

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

Peter Norman Sorensen

University of Copenhagen - Department of Economics ( email )

Oster Farimagsgade 5
Building 26
Copenhagen K, 1353
Denmark
+45 35 32 3056 (Phone)

HOME PAGE: http://www.econ.ku.dk/sorensen

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