Peter DeMarzo, Ilan Kremer and Andrzej Skrzypacz (2005, henceforth DKS) analyzed auctions in which bidders compete in securities. They show that a steeper security leads to a higher expected revenue for the seller, and also use this to establish the revenue ranking between standard auctions. In...

The Boston mechanism is among the most popular school choice pro- cedures in use. Yet, the mechanism has been criticized for its poor incentive and welfare performances, which led the Boston Public Schools to recently replace it with Gale and Shapley's deferred acceptance algorithm (henceforth,...

We study costs and benefits of differences of opinion between an adviser and a decision maker. Even when they share the same underlying preferences over decisions, a difference of opinion about payoff-relevant information leads to strategic information acquisition and transmission. A decision...

A principal chooses one of n=2 projects or an outside option. An agent is privately informed about the projects' benefits and shares the principal's preferences except for not internalizing her value from the outside option. We show that strategic communication is characterized by pandering: the...

Much of the existing theory of incentives describes a static relationship that lasts for just one transaction. This static assumption is not only unrealistic, but the resulting predictions appear to be at odds with many work organizations. The current paper introduces possible long-term...

Procurement of an innovation often requires substantial effort by potential suppliers. Motivating effort may be difficult if the level of effort and quality of the resulting innovation are unverifiable, if innovators cannot benefit directly by marketing their innovations, and if the buyer cannot...