Essays on Information Manipulation

The first chapter investigates how an autocratic (dictatorial) regime uses propaganda to stay in power by suppressing a mass protest by citizens or a coup d'état by the élite through the models of information manipulation. Agents (citizens or the élite members) participate in a collective action of an uprising against the status quo basing their decision on the belief about the strength of the Dictator which can be manipulated by the latter. I differentiate the agents depending on how they update beliefs: from fully rational to fully naïve. The manipulation of information is only partially successful in all cases. I find that the benefit of propaganda for the Dictator depends on how agents process propaganda messages. In fact, the efficiency of successful propaganda decreases in the strength of the Dictator if citizens are partially rational and increases in the strength of the Dictator if citizens are naïve. Moreover, the efficiency of propaganda does not matter in case of the coup by the élite members. Finally, when agents are fully rational and recognize the presence of propaganda, it becomes inefficient in increasing the probability of regime survival. These results indicate that understanding how agents respond to the manipulation of their beliefs is crucial also in understanding how propaganda works. In the second chapter, which is a joint work with Francesco Massazza, we test the Grossmann-Stieglitz paradox in a setting with voluntary disclosure of partially verifiable evidence. We place our paper at the intersection of two strands of literature: the research on information certification and on the disclosure of private information. In particular. We propose an asymmetric information model in which the seller can provide partially verifiable evidence about privately known quality and the buyer can request costly authentication of the quality. We characterize the equilibrium strategies of seller and buyer for both pooling and separating equilibria. We formalize necessary and sufficient conditions for each of the equilibria we find. We show the possibility of (partially) overcoming the Grossmann-Stieglitz paradox and show that voluntary disclosure of partially verifiable information can solve it. We study the role of the information cost in equilibrium formation. Finally, we analyze the effect of imperfect authentication technology and find that quality authentication can be acquired in equilibrium, unlike the perfect precision case. In the third (unfinished) chapter, I try to analyze how dictatorial regimes can control media in order to suppress protest movements using a repeated public good game with information manipulation. At each round, citizens collectively participate in a mass protest aiming at overthrowing a dictator while the latter can defend her power through propaganda if she is not sure her regime is strong enough to survive the current attack. The propaganda can backfire due to only partial control over media. The preliminary results show that if protests unfold but repeatedly fail, agents learn that it is due to the strength of the regime and desist. The probability of regime survival increases over time but is not monotonic in the probability of the propaganda being successful.