Sellers benefit on average from revealing information about their goods to buyers, but the incentive to exaggerate undermines the credibility of seller statements. When multiple goods are being auctioned, we show that ordinal cheap talk, which reveals a complete or partial ordering of the...

Buyers frequently delegate purchase decisions to sellers who are better informed about supply options and the cost of service. This paper analyzes how buyers optimally contract with sellers who vary in their expertise at prescribing service. We show that the most expert suppliers offer the...

This paper analyzes the allocation of decision-making authority when the principal has reputation concerns. The principal can either keep the authority and consult the agent (an expert), or delegate the authority to the agent; however, the outside evaluator cannot observe the allocation of...

In this paper, we study efficient dissolution of partnerships in a context of incomplete information. We generalize the results of Cramton, Gibbons and Klemperer (1987) to situations where the partnership takes on a common value that may depend upon all partners' types, so that each partner's...

This paper is concerned with the general question of the provision of information by financial intermediaries to their customers. Specifically, it analyzes the different ways the market can be organized and its effects on pricing and the level of information investors obtain. We find that market...

We examine a dynamic, durable goods model. A monopolist faces two types of consumers who value the monopolist’s goods differently. The quality of the good improves over time and an improvement is only valuable to consumers if they have previous improvements. In each period, the monopolist can...

New technology is usually expensive and it takes time for manufacturers to make the technology more accessible. In the stereo industry, the first Super Audio Compact Disk (SACD) player made by Sony, SCD-1, sold for $5,000 in 1999; in 2002 the cheapest of Sony's new SACD players, SCD-CE775, had a...

Self regulation is a mechanism of quality vigilance that is frequently used in credence good industries. The providers in these markets generally form a Self Regulated Organization (SRO), composed by some members of the industry, whose main job is to convince consumers through an active...

It is widely speculated that the adoption of a technology takes off to be self-sustaining if it reaches the critical mass. However, the sponsors of competing technologies may engage in strategic maneuvering in the adoption process. Indeed, this paper shows that in the de facto standardization...

We examine patent pools in the context of a consortium standard. Although such pools of complementary technologies are approved by antitrust authorities, the actual implementation has proved to be problematic. We identify two possible obstacles: free riding and bargaining failure. We also...