Adverse selection in procurement arises when low-cost bidders are also lowquality suppliers. We propose a mechanism called LoLA which, under some conditions, is the best incentive-compatible mechanism for maximizing either the seller's or the social surplus in the presence of adverse selection....

We show that efficient exchange obtains independently of the degree to which a legal system protects the rights of owners. We study a number of different legal rules, including property rules (strong protection), liability rules (any party can take the owner's asset but must pay a...

This paper provides a refinement that uniquely selects the ex-ante Pareto dominant equilibrium in a cheap talk game. The refinement works by embedding any cheap talk game into a class of two-stage games where: in stage 1 sender and receiver choose their biases at a cost, and in stage 2 the cheap...

All businesses operate under a set of rules - laws and regulations - that occasionally require updating. Improving these 'rules of the competitive game' can, sometimes, be vital for a business or industry to survive. Strategy Beyond Markets explains how the rules of the competitive game are...

Adverse selection in procurement arises when low-cost bidders are also lowquality suppliers. We propose a mechanism called LoLA which, under some conditions, is the best incentive-compatible mechanism for maximizing either the seller's or the social surplus in the presence of adverse selection....