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During the recent sales of UMTS licenses in Europe some countries used auctions while others resorted to so-called Beauty Contests. There seems to be a wide consensus among economists that in these and other contexts like privatisation an auction is the better selling mechanism. However, why...
Persistent link: https://www.econbiz.de/10005051542
Economists long considered money illusion to be largely irrelevant. Here we show, however, that money illusion has powerful effects on equilibrium selection. If we represent payoffs in nominal terms, choices converge to the Pareto inefficient equilibrium; however, if we lift the veil of money by...
Persistent link: https://www.econbiz.de/10005406033
behavior of others. This may lead to welfare-reducing ‘overreactions’ to public signals. We present an experiment based on a … extreme case of a pure coordination game, subjects still use their private signals, preventing full coordination … welfare if coordination is socially desirable. …
Persistent link: https://www.econbiz.de/10008572521
Even when labour mobility is low, international integration affectslabour markets by making jobs more mobile. This runs via product market integration, which is an essential element of European integration. Increasing job mobility aects the possibilities single countries perceive in pursuing...
Persistent link: https://www.econbiz.de/10005406218
private provision of public goods. We examine whether reciprocity can resolve the associated coordination problem. The …
Persistent link: https://www.econbiz.de/10010812485
contrast, uncertainty about the catastrophic threshold typically causes coordination to collapse. Whether the probability …
Persistent link: https://www.econbiz.de/10010877724
Global Games approach we can solve this coordination problem and eliminate the problem of multiple equilibria. We show how …
Persistent link: https://www.econbiz.de/10005094193
. Whereas agents have a coordination motive to take the same position, at the social level effective market coordination per se …
Persistent link: https://www.econbiz.de/10005765918
We analyze strategic interactions between two competing distributors of an independent TV channel. Consistent with most of the relevant markets, we assume that the distributors set end-user prices while the TV channel sets advertising prices. Within this framework we show that the distributors...
Persistent link: https://www.econbiz.de/10010558688
The present note analyzes the Simultaneous Ascending Bid Auction with arbitrarily many bidders with decreasing marginal valuations under complete information. We show that the game is solvable by iterated elimination of weakly dominated strategies if the efficient allocation assigns at least one...
Persistent link: https://www.econbiz.de/10005406019