We consider competitive bidding for a business license, via an open ascending-price auction, between two symmetric incumbents and a potential entrant, each of whom is privately informed about her own valuation of the license. Entry stands to reduce the payoff of each incumbent below that in...

This paper studies the role of bundling in the efficient provision of excludable public goods. We show that bundling in the provision of unrelated public goods can enhance social welfare. With a large number of goods and agents, first best can be approximated with pure bundling. For a parametric...

According to globalization, certain kinds of public goods, which used to be working as the goods just in a national economy, are getting internationalized or released for foreigners as well. In addition, those goods often exhibit differentiated features for a certain degree. The goods as such...

Microfinance programmes provide poor people with small loans given to jointly liable self-selected groups. Follow-up loans provide incentives to repay. In an experiment we investigate the influence of those features on strategic default. Each group member invests in an individual risky project,...

We conduct an experiment to explore the durability and transferability of the increase in contributions to a public good resulting from the existence of a particular type of implicit informal sanction. Rege and Telle (2003) find that in one-shot games, the sanctioning system leads to high...

In this paper, we adopt the collective approach to consumer behavior --- which supposes that each household member is characterized by his/her own preferences and the decision process results in Pareto-efficient outcomes --- and assume, in addition, that agents are egoistic and consumption is...

Consider the case of a firm with private valuation information bargaining with a supplier over the price and quantity of a good. If the firm and the supplier bargain directly, the bargaining outcome may not yield a first-best outcome due to the presence of information rents. The question we...

Empirical evidence shows that macroeconomic fundamentals have little explana-tory power for nominal exchange rates. On the other hand, the recent “microstruc-ture approach to exchange rates” has shown that most exchange rate volatility at short to medium horizons is related to order flows....

We examine the impact of public information in an economy where agents also have diverse private information. Our work builds on seminal contributions by Townsend (1983) and Phelps (1983), and more recently Woodford (2002), which emphasized the importance of higher-order beliefs – that is,...

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...