Applying auction theory to the toxic-asset rescue plan currently released by theUnited States Treasury Department, this paper demonstrates an equilibrium wheremoderately poor bidders outbid rich bidders in such auctions. After defeating theirrich rivals and acquiring the toxic assets, such...

The core is reformulated to incorporate the externality typical in strategic formgames. Any coalition of players may deviate by trying to commit to a profile of actionsdifferent from a status quo. The outsiders of the coalition may take a coordinatedmeasure, incentive-feasibly for themselves, to...

Competitive behaviors such as outbidding one’s rivals may be countered by therivals’ threat of mutually destructive objections. In an Arrow-Debreu model of productioneconomies with firms privatized by property rights, we model such hinderedcompetitive behaviors as a coalition’s attempt to...

In production economies, the extent to which non-equilibria are blocked dependson specific rules that allocate authority among shareholders, because a blocking coalition’sresources are affected by the firms it jointly owns with outsiders. Based on anotion of stochastic blocking, we extend...

We characterize optimal selling mechanisms in auction environments where biddersmust incur a cost to learn their valuations. These mechanisms specify for eachperiod, as a function of the bids in previous periods, which new potential buyersshould be asked to bid. In addition, these mechanisms...

A model of English auction that allows jump bidding is proposed. When twoobjects are sold separately via such English auctions, I construct an equilibrium suchthat bidders signal via jump bids, thereby forming rational expectations of the priceswithout relying on any central mediator. This...

In production economies, the extent to which non-equilibria are blocked dependson the allocation of control rights among shareholders, because a blocking coalition’sresources are affected by the firms it jointly owns with outsiders. We formulate a notionof blocking that takes such...

Applying auction theory to the toxic-asset rescue plan currently released by the United States Treasury Department, this paper demonstrates an equilibrium where moderately poor bidders outbid rich bidders in such auctions. After defeating their rich rivals and acquiring the toxic assets, such...

The core is reformulated to incorporate the externality typical in strategic form games.  Any coalition of players may deviate by trying to commit to a profile of actions different from a status quo.  The outsiders of the coalition may take a coordinated measure, incentive-feasibly for...

 A social planner wishes to launch a project but the contenders capable of running the project are cash-constrained and may default.  To signal their capabilities, the contenders may finance their bids through debt or equity, depending on the mechanism chosen by the social planner.  When...