Essays on microeconomic theory

An information structure is a random vector that governs the probabilistic relationship between the states of the world and the signals. An information order is a partial order defined on a class of information structures that captures the idea of when one information structure provides more information about the state of the world than the other does. I investigate how efficiency and the welfare of traders change with respect to information.; The dissertation consists of four essays. The first essay investigates the role of private information in lemon problems. I compare the performance of mechanisms under different private information structures in an interdependent value, bilateral bargaining environment, where the seller can potentially access private information of different precision ranked by Monotone Information Order (MIO). The relationship between efficiency and information asymmetry is, in general, not monotonic. I provide and discuss sufficient conditions under which monotonicity is guaranteed. The second essay investigates the role of public information in lemon problems. I consider an alternative way to measure information asymmetry between a buyer and a seller: Information asymmetry is decreasing when the public information becomes more informative. Fixing a set of mechanisms, where one mechanism corresponds to one realization of the public signal, I show that the expected information rent of the seller under the set is decreasing in information while the expected gain from trade collected by the set is, in general, not monotonic. The third essay extends the model in the first one to the case of general ownership structures. The fourth essay, independent to the first three ones, examines the pricing and production of a durable good in the presence of network effects. I show that the model with network effect can be transformed to an "equivalent" ordinary durable good monopoly model with a gap. Moreover, when the network effect is of significant magnitude, it would like to flood the market immediately.