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Garratt, Rod - 2008

The English auction is susceptible to tacit collusion when post-auction inter-bidder resale is allowed. We show this by constructing equilibria where, with positive probability, one bidder wins the auction without any competition and divides the spoils by optimally reselling the good to the...

Persistent link: https://www.econbiz.de/10003850403

Optimal auction design and irrelevance of private information

Mylovanov, Tymfiy; Tröger, Thomas - 2008

We consider the problem of mechanism design by a principal who has private information. We point out a simple condition … under which the privacy of the principal's information is irrelevant in the sense that the mechanism implemented by the … principal coincides with the mechanism that would be optimal if the principal's information were publicly known. This condition …

Persistent link: https://www.econbiz.de/10003850431

International financial shocks in emerging markets

Brei, Michael; Enders, Almira - 2009

In the present paper, we develop a two-sector general equilibrium model of a small open economy to explore the transmission mechanisms of external financial shocks. In particular, we use a cash-in-advance model with limited participation augmented with a financial friction in the form of a...

Persistent link: https://www.econbiz.de/10003850647

Product pricing when demand follows a rule of thumb

Matzke, Christina; Wirth, Benedikt - 2009

We analyze the strategic behavior of firms when demand is determined by a rule of thumb behavior of consumers. We assume consumer dynamics where individual consumers follow simple behavioral decision rules governed by imitation and habit as suggested in consumer research. On this basis, we...

Persistent link: https://www.econbiz.de/10003850650

Risk and expected utility theory

Pope, Robin; Selten, Reinhard - 2009

The paper re-expresses and complements arguments against the normative validity of expected utility theory in Robin Pope (1983, 1991a, 1991b, 1985, 1995, 2000, 2001, 2005, 2006, 2007). The objections concern the neglect of the evolving stages of knowledge ahead (stages of what the future will...

Persistent link: https://www.econbiz.de/10003850661

Ascending combinatorial scoring auctions

Rieck, Thomas - 2009

valuable information about the auctioneer for his competitors, providing an incentive not to reveal it.In our setting,it is … a close connection to the original proxy auction exists. -- Multi-object auction ; multi-attribute auction ; information …

Persistent link: https://www.econbiz.de/10003850664

Minimum wages and excessive effort supply

Kräkel, Matthias; Schöttner, Anja - 2009

It is well-known that, in static models, minimum wages generate positive worker rents and, consequently, inefficiently low effort. We show that this result does not necessarily extend to a dynamic context. The reason is that, in repeated employment relationships, firms may exploit workers future...

Persistent link: https://www.econbiz.de/10003850666

Job assignments, intrinsic motivation and explicit incentives

Nafziger, Julia (contributor) - 2008

This paper considers the interplay of job assignments with the intrinsic and extrinsic motivation of an agent. Job assignments influence the self confidence of the agent, and thereby his intrinsic motivation. Monetary reward allow the principal to complement intrinsic motivation with extrinsic...

Persistent link: https://www.econbiz.de/10003782278

Limited liability and the risk-incentive relationship

Budde, Jörg (contributor); Kräkel, Matthias (contributor) - 2008

Several empirical findings have challenged the traditional view on the trade-off between risk and incentives. By combining risk aversion and limited liability in a standard principal-agent model the empirical puzzle ont hepositive relationship between risk and incentives can be explained....

Persistent link: https://www.econbiz.de/10003782288

Perfect competition in an oligopoly (including bilateral monopoly)

Dubey, Pradeep (contributor); Sondermann, Dieter (contributor) - 2008

We show that if limit orders are required to vary smoothly, then strategic (Nash) equilibria of the double auction mechanism yield competitive (Walras) allocations. It is not necessary to have competitors on any side of any market: smooth trading is a substitute for price wars. In particular,...

Persistent link: https://www.econbiz.de/10003782307