This paper revisits the licensing of a non--drastic process innovation by an outside innovator to a Cournot oligopoly. We propose a new mechanism that combines a restrictive license auction with royalty licensing. This mechanism is more profitable than standard license auctions, auctioning...

The literature on partnership dissolution generally takes the dissolution decision as given and examines whether the outcome is efficient. A well-known result is that <InlineEquation ID="IEq1"> <EquationSource Format="TEX">$$k+1$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <mrow> <mi>k</mi> <mo>+</mo> <mn>1</mn> </mrow> </math> </EquationSource> </InlineEquation>-price auctions dissolve a partnership efficiently when the share structure is sufficiently close to equal....</equationsource></equationsource></inlineequation>

We revisit the classical result that financing a pure public good through taxation of private consumption is inefficient. To this standard setup we add a consumption contest in which consumers can win a prize. We show that an appropriately chosen contest—which we call a ‘tax lottery’—can...

Decision-making processes are studied using non-standard all-pay structures. Our interest is motivated by regulatory, political, legal, military, and economic applications in which individual actions determine the consequences for a larger group or the general public. The common features of...

We revisit the classical result that taxation of private consumption is distortionary and therefore precludes the efficient provision of public goods. We introduce a nonlinear consumption tax which we call a ‘tax lottery’. Under this scheme, an ad-valorem consumption tax is supplemented with...

There are legal grounds to hear competitors in merger control proceedings, and competitor involvement has gained significance. To what extent this is economically sensible is our question. The competition authority applies some welfare standard while the competitor cares about its own profit. In...

We study decision making processes with non-standard all-pay structures. In our first group of applications, individual members of some institution—due to public pressure or expectation—propose reductions of their own income, e.g., corporate board members reducing their bonus payments in an...

This contribution revisits the problem of allocating R&D subsidies by government agencies. Typically, the applicants’ financial constraints are private information. The literature has recommended the use of auctions in order to reduce information rents and thus improve the efficiency of how...

A budget-constrained buyer wants to purchase items from a shortlisted set. Items are differentiated by observable quality and sellers have private reserve prices for their items. The buyer’s problem is to select a subset of maximal quality. Money does not enter the buyer’s objective...