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Andy

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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 4.01

Email: azapech (ατ) gmail.com

Phone: Microsoft Teams

I am a Professor of Economics at the University of Edinburgh. 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.

My research interests lie in the field of microeconomic theory and applications, focusing on communication and information design, optimal contracts, and robust decision theory.

Curriculum Vitae

Google Scholar profile

Working Papers

‣ Fair hiring (with Karl Schlag)

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

We investigate fairness of hiring procedures using a model of sequential search. To be fair means not to discriminate interviewed candidates based on their observable characteristics or by the order in which they are interviewed. We show that fair hiring prescribes to accept the first candidate who belongs to a prespecified set. Fair hiring strategy becomes a simple threshold strategy when the acceptance criterion admits a utility representation. Moreover, fair hiring comes at a relatively small cost. The optimal value of unconstrained hiring is at most twice that of fair hiring.

‣ Compromise, don't optimize: Generalizing perfect Bayesian equilibrium to allow for ambiguity (with Karl Schlag)

[previously titled "Compromise, don't optimize: A prior-free alternative to perfect Bayesian equilibrium"]

We introduce a solution concept for extensive-form games of incomplete information in which players can have multiple priors. Players’ choices are based on the notions of complaints and compromises. Complaints come from hypothetical assessors who have different priors and evaluate the choices of the players. Compromises are choices that aim to make these complaints small. The resulting solution concept is called perfect compromise equilibrium. This generalizes perfect Bayesian equilibrium. We use this concept to provide first insights into how rich uncertainty influences Cournot and Bertrand markets, public good provision, Spence's job market signaling, bilateral trade with common value, and forecasting.

‣ 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.

‣ Are there "Ratatouille" restaurants? On anticorrelation of food quality and hygiene (with Hisayuki Yoshimoto)

We study the empirical relationship between hygiene conditions in restaurants and their food quality rated by both professional reviewers and consumers. Using evidence from the UK, we show that this relationship is negative and statistically significant. So, a higher food quality rating is generally associated with a less sanitary kitchen. We find that 3% of Michelin starred restaurants in our dataset have poor hygiene conditions, while the same is true for only 2% of non-Michelin starred restaurants. Our findings illuminate potential channels through which the anticorrelation between food quality and hygiene effort could be mitigated, and can be helpful for hygiene inspectors to prioritize restaurants in their inspection schedule.

‣ Persuasion meets delegation (with Anton Kolotilin)

A principal can restrict an agent's information (the persuasion problem) or restrict an agent's discretion (the delegation problem). We show that these problems are generally equivalent — solving one solves the other. We use tools from the persuasion literature to generalize and extend many results in the delegation literature, as well as to address novel delegation problems, such as monopoly regulation with a participation constraint.

‣ 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.