Unexpected variation in emissions can have an enormous impact on the prices of emission permits and the efficiency achieved in tradable permit markets. Shocks to emission levels can be correlated across firms; for example, most firms require more emission permits than planned for following a...

It is a well-established fact that corruption is a widespread phenomenon. An important aspect of corruption is that two parties act jointly in order to further their own interests at the expense of a third party. The response of the third party has a significant impact on the persistence of...

We give necessary and sufficient conditions for the existence of symmetric equilibrium without ties in common values auctions, with multidimensional independent types and no monotonic assumptions. When the conditions are not satisfied, we are still able to prove the existence of pure strategy...

In this paper we characterize the optimal allocation mechanism for $N$ objects, (permits), to $I$ potential buyers, (firms). Firms' payoffs depend on their costs, the costs of competitors and on the final allocation of the permits, allowing for externalities, substitutabilities and...

The optimal organizational form and optimal incentive contract are characterized for a team of money managers, assuming that the investor (principal) is risk averse and that each manager's (agent's) actions affect both that manager's expected return and the correlation of returns between...

This paper models individual choices of social groups and the formation of group identity, and examines the conditions with which the group identity reinforces the productivity of individuals. A social group is defined as a network that provides with a market for interactions to its members....

A (pure) strategy in a repeated game is a mapping from histories, or, more generally, signals, to actions. We view the implementation of such a strategy as a computational procedure and attempt to capture in a formal model the following intuition: as the game proceeds, the amount of information...

We examine the incentives of an interest group to provide a political decision-maker with policy-relevant information and to exert pressure on her. Both activities are costly but may induce the lobby's preferred policy. Our paper provides an integrated analysis of both lobbying activities and...

This paper reinterprets the gamma-core (Chander and Tulkens (1995, 1997)) and justifies it as well as its prediction that the efficient coalition structure is stable in terms of the coalition formation theory. It is assumed that coalitions can freely merge or break apart, are farsighted (that...

We investigate the issue of implementation via individually rational ex-post budget-balanced Bayesian mechanisms. We demonstrate that all social choice rules that generate a nonnegative ex-ante surplus, including ex-post efficient ones, can generically be implemented via such mechanisms. The...