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Andriy (Andy) Zapechelnyuk

School of Economics

University of Edinburgh

31 Buccleuch Place

Edinburgh EH8 9JT

United Kingdom

Location: 31 Buccleuch Place, Room 2.01

Email: azapech (ατ) gmail.com

Phone: Microsoft Teams

I am a Professor of Economics at the University of Edinburgh. I serve as an Associate Editor for Econometrica and Economic Theory/ETB. My research interests lie in the field of microeconomic theory and applications, focusing on communication and information design, optimal contracts, and robust decision theory.

Short Bio: I got a PhD from Stony Brook University in 2005. Before landing at Edinburgh in 2022, I spent some time as a researcher at the Center for the Study of Rationality (Hebrew University of Jerusalem) and the Hausdorff Center for Mathematics (University of Bonn), and I have taught at Kyiv School of Economics, Queen Mary University of London, University of Glasgow, and University of St Andrews.

Curriculum Vitae

Google Scholar profile

Working Papers

‣ Disclosure of causal vs. correlational information in markets with correlation neglect (with Dimitri Migrow)

We address the question of whether regulators should disclose consumer traits in competitive risk-sharing markets, such as insurance or credit markets, when consumers suffer from correlation neglect. We find that disclosure improves welfare if the trait has a strong causal effect on consumer's risk. However, when correlation plays a dominant role, disclosure of the trait leads to mispricing and lowers market participation. Our results highlight that causal effects support transparency, while correlational effects may justify privacy protection.

‣ On monotone persuasion (with Anton Kolotilin and Hongyi Li)

We study monotone persuasion in the linear case, where posterior distributions over states are summarized by their mean. We solve the two leading cases where optimal unrestricted signals can be nonmonotone. First, if the objective is s-shaped and the state is discrete, then optimal monotone signals are upper censorship, whereas optimal unrestricted signals may require randomization. Second, if the objective is m-shaped and the state is continuous, then optimal monotone signals are interval disclosure, whereas optimal unrestricted signals may require nonmonotone pooling. We illustrate our results with an application to media censorship.

‣ Optimal inquiry (with Tai-Wei Hu)

A decision maker acquires and processes information about an uncertain state of nature by an inquiry: a contingent sequence of questions to be asked before a decision is reached. Inquiry is a costly activity, with the cost proportional to its length. We characterize optimal inquiries and uncover two behavioral implications associated with costly inquiry: attention span reduction (i.e., favoring shorter inquiries by focusing on a subset of decisions and assigning them different priorities) and confirmation bias (i.e., seeking evidence through inquiry to confirm a prior guess of which decisions are optimal). This framework can be used to understand prominent cognitive biases, such as framing and search satisficing in healthcare and tunnel vision in criminal investigation.

‣ Disclosure in insurance markets with limited screening (with Dimitri Migrow)

We investigate the impact of information disclosure, via a statistical instrument, on consumer welfare in competitive insurance markets with limited screening. We demonstrate that, under natural constraints on information disclosure, no statistical instrument is "safe" to implement. There always exists an open set of prior beliefs about the risk types of consumers, compatible with the currently observed market allocation, under which additional information disclosure strictly worsens welfare.

‣ Fair hiring procedures (with Karl Schlag)

[previously titled "Fair sequential search"; absorbed an earlier working paper "Value of information when searching for a secretary"]

We conceptualize what it means for job applicants to be treated fairly during the hiring. Two principles are postulated within a model of sequential search: equal treatment of equals and no rejections by chance. Fair procedures are fully characterized. Accordingly, applicants need to be shortlisted and interviewed in a random order. Moreover, job offers need to be made either on the spot or only after interviewing all applicants on the shortlist. Fair hiring procedures are easy to monitor. To avoid misuse, we advocate that before starting the interviews, the shortlist and hiring criteria must be preregistered with a regulator.

‣ Persuasion under insufficient reason (with Anton Kolotilin) [Slides]

A sender designs how to disclose information about the state of the world to persuade a receiver to accept a proposal. The sender is ignorant about both the receiver's type and his risk attitude. The sender applies the principle of maximum entropy to resolve her ignorance. We show that the maximum-entropy utility is risk neutral if nothing is known about the agent's utility, and it is CARA if the average utility is known. Furthermore, the optimal signal is either fully revealing or completely uninformative if nothing is known about the distribution of the agent's type, or if its mean is known; the optimal signal is a censorship if the mean and variance are known. To derive our results, we propose a novel representation of preference over lotteries.

‣ Bargaining under incomplete information with the help of delay (with Karl Schlag)

We study bargaining under incomplete information, with applications to trade and to provision of public good. In our setting, agents not only agree on how they share their output, but also on how much output they produce. We are interested in bargaining rules that do not depend on priors. We find a unique rule that satisfies a set of axioms. Under this rule, the higher the surplus, the more output is produced. Moreover, the produced output is shared as in the Nash bargaining solution. We present a dynamic protocol that implements this rule for any priors. Heterogeneous discount factors and degrees of risk aversion can be included.

‣ Competing e-commerce intermediaries (with Alexander Matros)

We consider a model where two e-commerce platforms, such as internet auctions, compete for sellers who are heterogeneous in their time preferences. Contrary to the literature which argues that if two platforms coexist in equilibrium, then the “law of one price” must hold, we demonstrate that two platforms may set different prices and have positive equilibrium profits by exploiting heterogeneity of sellers' time preferences. In such an equilibrium less patient sellers choose the more popular, but more expensive, platform, while more patient sellers prefer the less popular and cheaper one.