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Optimal information disclosure and market outcomes

Hopenhayn, Hugo; Saeedi, Maryam - In: Theoretical Economics 18 (2023) 4, pp. 1317-1344

This paper addresses two central questions in markets with adverse selection: How does information impact the welfare of market participants (sellers and buyers)? Also, relatedly, what is the optimal information disclosure policy and how is it affected by the planner’s relative welfare weight...

Persistent link: https://www.econbiz.de/10014536888

The implications of pricing on social learning

Arieli, Itai; Koren, Moran; Smorodinsky, Rann - In: Theoretical Economics 17 (2022) 4, pp. 1761-1802

Two firms produce substitute goods of unknown quality. At each stage the firms set prices and a consumer with private information and unit demand buys from one of the firms. Both firms and consumers see the entire history of prices and purchases. Will such markets aggregate information? Will the...

Persistent link: https://www.econbiz.de/10014536948

Contests with sequential entry and incomplete information

Deng, Shanglyu; Fu, Qiang; Wu, Zenan; Zhu, Yuxuan - In: Theoretical Economics 19 (2024) 2, pp. 705-742

This paper provides a general study of a contest modeled as a multiplayer incomplete-information, all-pay auction with sequential entry. The contest consists of multiple periods. Players arrive and exert efforts sequentially to compete for a prize. They observe the efforts made by their earlier...

Persistent link: https://www.econbiz.de/10015419631

Asset bubbles and product market competition

Queirós, Francisco - In: Theoretical Economics 19 (2024) 1, pp. 325-364

This paper studies the interplay between asset bubbles and product market competition. It offers two main insights. The … first is that imperfect competition creates a wedge between interest rates and the marginal product of capital. This makes … subsidy, bubbles stimulate competition and reduce monopoly rents. I show that bubbles can destroy efficient investment and …

Persistent link: https://www.econbiz.de/10014537011

A common-value auction with state-dependent participation

Lauermann, Stephan; Wolinsky, Asher - In: Theoretical Economics 17 (2022) 2, pp. 841-881

This paper analyzes a common-value, first-price auction with state-dependent participation. The number of bidders, which is unobservable to them, depends on the true value. For participation patterns with many bidders in each state, the bidding equilibrium may be of a "pooling" type---with high...

Persistent link: https://www.econbiz.de/10014536902

The shape of luck and competition in winner-take-all tournaments

Ryvkin, Dmitry; Drugov, Mikhail - In: Theoretical Economics 15 (2020) 4, pp. 1587-1626

In winner-take-all tournaments, agents' performance is determined jointly by effort and luck, and the top performer is rewarded. We study the impact of the ''shape of luck'' -- the details of the distribution of performance shocks -- on incentives in such settings. We are concerned with the...

Persistent link: https://www.econbiz.de/10013189045

The formation of networks with local spillovers and limited observability

König, Michael David - In: Theoretical Economics 11 (2016) 3, pp. 813-863

This paper analyzes the formation of networks in which each agent is assumed to possess some information of value to the other agents in the network. Agents derive payoff from having access to the information of others through communication or spillovers via the links between them. Linking...

Persistent link: https://www.econbiz.de/10011599586

Equilibria in symmetric games: Theory and applications

Hefti, Andreas - In: Theoretical Economics 12 (2017) 3, pp. 979-1002

This article presents a new approach to analyze the equilibrium set of symmetric, differentiable games by separating multiple symmetric equilibria and asymmetric equilibria. This separation allows the investigation of, for example, how various parameter constellations affect the scope for...

Persistent link: https://www.econbiz.de/10012010004

Characterization and uniqueness of equilibrium in competitive insurance

Luz, Vitor Farinha - In: Theoretical Economics 12 (2017) 3, pp. 1349-1391

This paper provides a complete characterization of equilibria in a game-theoretic version of Rothschild and Stiglitz's (1976) model of competitive insurance. I allow for stochastic contract offers by insurance firms and show that a unique symmetric equilibrium always exists. Exact conditions...

Persistent link: https://www.econbiz.de/10012010015

On competitive nonlinear pricing

Attar, Andrea; Mariotti, Thomas; Salanié, François - In: Theoretical Economics 14 (2019) 1, pp. 297-343

We study a discriminatory limit-order book in which market makers compete in nonlinear tariffs to serve a privately informed insider. Our model allows for general nonparametric specifications of preferences and arbitrary discrete distributions for the insider's private information. Adverse...

Persistent link: https://www.econbiz.de/10012215305