We analyze the two-bidder discriminatory auction with downward sloping marginal valuations and a continuous, variable award. We allow for a common component in marginal valuations and affiliation. We focus on problems that admit solutions with strictly downward sloping bidding schedules. Using...

A firm can merge with one of n potential partners. The owner of each firm has private information about both his firm's stand-alone value and a component of the synergies that would be realized by the merger involving his firm. We characterize incentive-efficient mechanisms in two cases. First,...