We analyze the distribution of broadcasting revenues by sports leagues. We show that when the teams engage in competitive bidding to attract talent in an isolated league, the league’s optimal choice is full revenue sharing (resulting in full competitive balance). In contrast, when the teams of...

The holdup problem arises when parties negotiate to divide the surplus generated by their ex ante noncontractable investments. We study this problem in a model which, unlike the stylized static model, allows the parties to continue to invest until they agree on the terms of trade. These possible...

We distinguish two components of self-confidence in a financial market: private confidence measures the self-confidence level of speculators, while public confidence measures the confidence level they attribute to their competitors. We then study how independent changes in these components...

We consider an extension of the standard Rubinstein model where both players are randomly allowed to leave the negotiation after a rejection, in which case they obtain a payoff known value. We show that, when the value of the outside opportunities is of intermediate size, there exist a continuum...

We consider a common investment project that is vulnerable to a self-fulfilling coordination failure and hence is strategically risky. Based on their private information, agents { who have heterogeneous investment incentives - form expectations or "sentiments" about the project's outcome. We...

In many countries, the collective sale of TV rights by sports leagues has been challenged by the antitrust authorities. In several cases, however, leagues won in court, on the ground that sport cannot be considered a standard good. In this paper, we investigate the conditions under which the...

We propose a new bargaining solution, based on the idea - borrowed from Hobbes - that the agreement reached in a negotiation should be determined by how the direct conflict resulting from disagreement would be resolved. The explicit modeling of the disagreement game directly leads to the...

In this paper we extend the standard matching analysis of decentralized markets allowing for the possibility that some traders are matched to more than one trader on the opposite side of the market. In contrast to the literature, we are able to reconcile the Walrasian equilibrium with the...

We characterize the steady state of a market with random matching and bargaining, where the sellers' goods can perish overnight. Generally, the quantity traded is suboptimal, prices are dispersed and their is a dead-weight loss caused by excess supply or demand. In the limit, as the cost of...