In this paper we examine the problem of dynamic adverse selection in a stylized market where the quality of goods is a seller’s private information while the realized distribution of qualities is public information. We show that in equilibrium all goods can be traded if the size of the supply...

In this paper we study the typical dilemma of social coordination between a risk- dominant convention and a payoff-dominant convention. In particular, we consider a model where a population of agents play a coordination game over time, choosing both the action and the network of agents with whom...

In this paper we apply the instrumental approach to social preferences in order to distinguish among various shapes of preferences for social status. In particular, we consider the shape of reduced preferences that emerge in the equilibrium of a two-sided matching model with non-transferable...

In this paper we study games where the space of player types is atomless, action spaces are second countable, and payoffs functions satisfy the property of strict single crossing in types and actions. Our main finding is that in this class of games every Nash equilibrium is essentially strict....

In this paper we study the impact of redistributive policies when agents can signal their relative standing by spending on a conspicuous good. In particular, we analyze how the shape of the status function (i.e. how relative standing is computed and evaluated) may affect the equilibrium outcome...

We investigate the effects of introducing a linear labor income tax under the assumptions that individuals have concerns for social status, that they can signal their relative standing by spending on a conspicuous good, and that the tax revenue is redistributed by means of lump sum transfers. We...

If preferences are rational and continuous, then strict convexity implies that the demand correspondence is single-valued (e.g. Barten and B¨ohm, 1982, lemma 7.3). We show that if, in addition, preferences are strictly monotone then the converse is also true, namely single-valuedness of the...

In this paper we examine the problem of dynamic adverse selection in a stylized market where the quality of goods is a seller’s private information. We show that in equilibrium all goods can be traded if a simple piece of information is made publicly available: the size of the informed side of...

We provide a necessary and sufficient condition for goods to be normal when utility functions are differentiable and strongly quasi-concave. Our condition is equivalent to the condition proposed by Alarie et al. (1990), but it is easier to check: it only requires to compute the minors associated...

In this paper we study how the presence of a small amount of noise in signaling games impacts on the likelihood of separation and, hence, the likelihood of information transmission. We consider a variant of a standard signaling model where a source of exogenous noise affects the signals that...