We introduce a two-period economy with asymmetric information about the state of nature that occurs in the second period. Each agent is endowed with an information structure that describes her (incomplete) ability to prove whether or not a state has occurred. We show that if the number of states...

Private state verification is introduced in a two-period economy with spot markets in both periods and complete futures markets for contingent delivery in the second period. Existence of equilibrium is established, under standard assumptions. An example is presented in which a complete set of...

We consider a model in which a free daily newspaper distributes news to readers and sells ad-space to advertisers, having private information about its readership. Depending on the type of readers in the market, the newspaper's may have a "plentiful and seeking" audience or a "lacking and...

We introduce asymmetric information about consumers' transportation costs (i.e., the degree of product differentiation) in the model of Hotelling (1929). When the transportation costs are high, both firms have lower profits than in the case of perfect information. Contrarily, both firms may...

In this paper we compare the costs of two regulatory policies about the entry of new firms. We consider an incumbent firm that has more information about the market demand than the regulator. Then, the incumbent firm can use this advantage to persuade the regulator to make entry more difficult....

In an incomplete regulation framework the Regulator cannot replicate all the possible outcomes by himself since he has no influence on some firms present in the market. When facing asymmetric information regarding the regulated firm’s costs, it may be better for the Regulator to allow the...

We propose the notion of objects of choice as uncertain consumption bundles, extending the formulation of Arrow (1953). Agents sign “contracts for uncertain delivery”, which specify a list of alternative bundles, instead of a single one. This allows us to incorporate uncertainty and...

This paper presents a game where the incumbent firm uses the price as a signal about demand size. Without observing the demand, the regulator has to decide if the entry of new firms will be allowed. The game has a pooling Perfect Bayesian Equilibrium in which the incumbent firm chooses the...

We investigate the continuity of equilibrium in differential information economies with a finite number of agents. In this setting, agents can make contingent contracts based on events that are commonly observed. With private information modelled as finite partitions of a compact and metrizable...

Based on Greenwald and Stiglitz (1988,1990), this work explores a simple model of microeconomic behaviour which incorporates the impact of capital markets imperfections generated by asymmetric information on firms’ optimal investment decision rules. In particular, this paper analyses how a...