This paper presents the authors' rejoinder to Zeithammer and Adams [Zeithammer, R., C. Adams. 2010. The sealed-bid abstraction in online auctions. Marketing Sci. 29(6) 964-987]. This rejoinder clarifies and qualifies conclusions of the original paper and makes suggestions for fruitful areas of...

This paper presents five empirical tests of the popular modeling abstraction that assumes bids from online auctions with proxy bidding can be analyzed "as if" they were bids from a second-price sealed-bid auction. The tests rely on observations of the magnitudes and timings of the top two proxy...

This paper presents a model of moral hazard where differences in actions are driven by differences in time-preferences rather than differences in risk-preferences. The paper discusses two solutions to the time-preference induced incentive problem. First, in some circumstances, the incentive...

This paper builds on the ideas of Manski (2006) and Wolfers and Zitzewitz (2005) to show when learning is allowed, an electronic market (a prediction market) may aggregate information. In particular, adding learning to the model used in Manski (2006) causes the market price to converge to the...

The paper shows that the answer is no. Holmstrom (1979) and Shavell (1979) show that the sell the firm contract does not achieve the first best when the principal and the agent have different preferences over risk. This paper shows that the sell the firm contract does not achieve the first best...

The paper presents a theoretical and empirical analysis of learning in a prediction market. The paper presents necessary and sufficient conditions for prices to converge to the probability of an event as information is incorporated into the market. The theoretical results are augmented with...