We propose an equilibrium model of duopolistic dynamic pricing in which a buyer alternates between two sellers for price offers over a finite time horizon. The game ends when the buyer accepts a price offer or the selling season is over, whichever comes first. Previous research (Granot et al.,...

We study a sealed-bid auction between two bidders with asymmetric independent private values. The two bidders own asymmetric shares in a partnership. The higher bidder buys the lower bidderʼs shares at a per-unit price that is a convex combination of the two bids. The weight of the lower bid is...

We characterize the surplus-maximizing trading mechanism under two-sided incomplete information and interim individual rationality, when one party can make a value-enhancing specific investment. This mechanism exhibits a trade-off between providing investment incentives and inducing voluntary...

This paper analyzes strategic choice in p-beauty contests. First, I show that it is not generally a best reply to guess the expected target value, even in games with n2 players, and that iterated best response strictly applied does not induce a choice sequence approximating pk⋅0.5. Second, I...

This paper considers a resource allocation mechanism that utilizes a profit-maximizing auctioneer/matchmaker in the Kelso–Crawford (1982) (many-to-one) assignment problem. We consider general and simple (individualized price) message spaces for firmsʼ reports following Milgrom (2010). We show...

We study a negotiation model with a disagreement game between offers and counteroffers. When players have different time preferences, delay can be Pareto efficient, thereby violates the presumption of the Hicks Paradox. We show that all equilibria are characterized by the extreme equilibria....

Several labor markets, including the job market for new Ph.D. economists, have recently developed formal signaling mechanisms. We show that such mechanisms are harmful for some environments. While signals transmit previously unavailable information, they also facilitate information asymmetry...

We offer a tractable model of tough negotiations and delayed agreement. The setting is an infinite horizon bilateral bargaining game in which negotiators can make strategic commitments to durable offers. Commitments decay stochastically, but uncommitted negotiators can make new commitments. The...

We use a laboratory experiment to study bargaining with random implementation. We modify the standard Nash demand game so that incompatible demands do not necessarily lead to the disagreement outcome. Rather, with exogenous probability q, one bargainer receives his/her demand, with the other...

I analyze how informal agreements can be sustained by moral emotions with regard to a large class of two-player games. Specifically, I assume that people feel guilty if they breach an agreement and that the guilt increases according to the degree of the harm inflicted on the other. A central...