In this laboratory experiment we study the use of strategic ignorance to delegate real authority within a firm. A worker can gather information on investment projects, while a manager makes the implementation decision. The manager can monitor the worker. This allows her to exploit any...

We study how resale affects auctions with costly entry in a model where bidders possess two-dimensional private information signals: entry costs and valuations. We establish the existence of symmetric entry equilibrium and identify sufficient conditions under which the equilibrium is unique. Our...

A buyer procures a network to span a given set of nodes; each seller bids to supply certain edges, then the buyer purchases a minimal cost spanning tree. An efficient tree is constructed in any equilibrium of the Bertrand game.

We study the effects of reputation and competition in a trust game. If trustees are anonymous, outcomes are poor: trustees are not trustworthy, and trustors do not trust. If trustees are identifiable and can, hence, build a reputation, efficiency quadruples but is still at only a third of the...

We address the common scenario where a group of agents wants to divide a set of items fairly, and at the same time seeks to optimize a global goal. Suppose that each item is a task and we want to find an allocation that minimizes the completion time of the last task in an envy-free manner, where...

Cheating such as corruption and tax evasion is prevalent in the developing world; therefore, many interventions have been undertaken to reduce cheating in developing countries. Although some field evidence shows that poverty is correlated with cheating, the causal effect of poverty on cheating in...

We show that in markets with asymmetric information, even if there is full agreement on the choice of optimal information quality, entrusting the choice of (unverifiable) public information quality to traders who benefit from such information leads to inefficiencies. However, delegation of...

We consider the optimality of liquidated damages contracts in a setting of contractual ambiguity and potential for disputes. We show that when parties are ambiguity averse enough, they will optimally choose liquidated damages contracts and sacrifice risk sharing opportunities.

I consider first-price auctions (FPA) and second-price auctions (SPA) with two asymmetric bidders. The FPA is known to be more profitable than the SPA if the strong bidder's distribution function is convex and the weak bidder's distribution is obtained by truncating or horizontally shifting the...

This paper studies a two-dimensional cheap talk game with two senders and one receiver. The senders possess the same information and sequentially send messages about that information. In one-dimensional sequential message cheap talk games where the state space is unbounded, the information is...