Francisco Poggi

Assistant Professor

University of Mannheim

Welcome!

I am a microeconomic theorist. My research focuses on the incentives to acquire, elicit, disclose, and conceal information. I am interested in industrial organization, law, and innovation.

I work at the University of Mannheim - Department of Economics as an Assistant Professor (W1) and received my Ph.D. from Northwestern University (2021).

News:

New version: Market-Based Mechanisms (with Quitzé Valenzuela-Stookey )

We study the problem of a principal who conditions their actions on the outcomes of a competitive market as a proxy for an unobserved payoff-relevant state. Agents in the market have private information about the state, and their choices reflect both their beliefs about the state and their expectations of the principal's actions. This introduces two-way feedback between policy and the market. In a general setting, we characterize the set of joint distributions of market outcomes, principal actions, and states that can be implemented in equilibrium by a principal with commitment power. We focus in particular on implementation under constraints imposed by concerns about manipulation and equilibrium multiplicity. Our characterization of the implementable set admits a tractable representation, and significantly simplifies the principal's design problem. We apply our results to study bailout policies.

CLEEN Conference. I'm co-organizing the 2023 annual conference of the Competition Law and Economics European Network (CLEEN).

The Mannheim Centre for Competition and Innovation (MaCCI), the Collaborative Research Center Transregio 224 EPoS at the universities of Bonn and Mannheim, and ZEW Mannheim are pleased to announce the 2023 annual conference of the Competition Law and Economics European Network (CLEEN).

CLEEN has provided an interdisciplinary platform for researchers in the field of law and economics since its first research workshop in Bonn in 2007. According to current planning, the 2023 CLEEN Conference will be held in person in Mannheim.

New draft: Strategic Concealment in Innovation Races (with Yonggyun Kim )

We investigate a firm's incentives to conceal an intermediate research discovery in order to influence its rival's choice of strategy in an innovation race. To study this, we introduce an innovation game where two firms dynamically allocate their resources between two distinct research and development (R&D) paths towards a final innovation: (i) developing it with the currently available but slower technology; (ii) conducting research to discover a faster new technology for developing it. We fully characterize the equilibrium behavior of the firms in the cases where their research progress is public and private information. Then, we extend the private information setting by allowing firms to conceal or license their intermediate discoveries. We show that when the reward of winning the race is high, firms sometimes conceal their interim discoveries, which inefficiently retards the pace of innovation.

Research

Market-Based Mechanisms

with Quitzé Valenzuela-Stookey

Abstract. Paper

We study the problem of a principal who conditions their actions on the outcomes of a competitive market as a proxy for an unobserved payoff-relevant state. Agents in the market have private information about the state, and their choices reflect both their beliefs about the state and their expectations of the principal’s actions. This introduces two-way feedback between policy and the market. In a general setting, we characterize the set of joint distributions of market outcomes, principal actions, and states that can be implemented in equilibrium by a principal with commitment power. We focus in particular on implementation under constraints imposed by concerns about manipulation and equilibrium multiplicity. Our characterization of the implementable set admits a tractable representation and significantly simplifies the principal’s design problem. We apply our results to study bailout policies.

Strategic Concealment in Innovation Races

with Yonggyun (YG) Kim.

Abstract. Paper

We investigate a firm’s incentives to conceal an intermediate research discovery in order to influence its rival’s choice of strategy in an innovation race. To study this, we introduce an innovation game where two firms dynamically allocate their resources between two distinct research and development (R&D) paths towards a final innovation: (i) developing it with the currently available but slower technology; (ii) conducting research to discover a faster new technology for developing it. We fully characterize the equilibrium behavior of the firms in the cases where their research progress is public and private information. Then, we extend the private information setting by allowing firms to conceal or license their intermediate discoveries. We show that when the reward of winning the race is high, firms sometimes conceal their interim discoveries, which inefficiently retards the pace of innovation.

A Taxation Principle with Non-Contractible Events

with Bruno Strulovici

Abstract. Paper.

In some legal settings it is not possible to contract with an agent ex ante. For example, a criminal process only starts after the crime was committed and only if the agent is apprehended. We study a quasilinear single-agent setting with private information and private actions in which the intervention of the designer is only triggered by certain outcomes. We introduce a property of social choice functions, identifiability, and show that implementable social choice functions satisfying this property can be implemented with a tariff, that is transfers that depend only on the realized outcome.

Liability Design with Information Acquisition

with Bruno Strulovici

Abstract. Paper

How to guarantee that firms perform due diligence before launching potentially dangerous products? We study the design of liability rules when (i) limited liability prevents firms from internalizing the full damage they may cause, (ii) penalties are paid only if damage occurs, regardless of the product’s inherent riskiness, (iii) firms have private information about their products' riskiness before performing due diligence. We show that (i) any liability mechanism can be implemented by a tariff that depends only on the evidence acquired by the firm if a damage occurs, not on any initial report by the firm about its private information, (ii) firms that assign a higher prior to product riskiness always perform more due diligence but less than is socially optimal, and (iii) under a simple and intuitive condition, any type-specific launch thresholds can be implemented by a monotonic tariff.

The Timing of Complementary Innovations

Abstract. (New version coming soon.)

This paper studies the dynamic completion of complementary tasks or projects. At each point in time, resources are allocated to projects that are completed as breakthroughs. I solve the problem of efficient dynamic allocation of resources by showing that, for complements, the solution must satisfy a regret-free property. I apply these results to study the problem of innovation when there is uncertainty about the difficulty of innovations. In some cases, the solution involves completing the projects in sequence. In others, it is optimal to work on multiple projects simultaneously. I provide simple conditions that determine the efficient timing of project completion.

Francisco Poggi

Assistant Professor

University of Mannheim

Welcome!

Research

Market-Based Mechanisms

Strategic Concealment in Innovation Races

A Taxation Principle with Non-Contractible Events

Liability Design with Information Acquisition

The Timing of Complementary Innovations

Work in Progress