Consider a competitive bank whose illiquid asset portfolio is funded by short-term debt that needs to be refinanced before the asset matures. In this setting, we show that maximal transparency is not socially optimal, and that the existence of social externalities of bank failures reduces...

We study a homogenous good triopoly in which firms first choose their cost-reducing R&D investments and consider alternative merger proposals, and then compete a la Cournot in the ensuing industry. We identify conditions under which both horizontal mergers and non-integration are sustained by...

Consider a competitive bank whose illiquid asset portfolio is funded by short-term debt that has to be refinanced before the asset matures. We show that in this setting maximal transparency is not socially optimal, and that the existence of social externalities of bank failures further lowers...

We study the optimal precision of public information disclosures about banks assets quality. In our model the precision of information affects banks' cost of raising funding and asset profile riskiness. In an imperfectly competitive banking sector, banks'stability and social surplus are...

We show that strategy-proof allocation mechanisms for economies with public goods are dictatorial—i.e., they always select an allocation in their range that maximizes the welfare of the same single individual (the dictator). Further, strategy-proof and efficient allocation mechanisms are...

We study how changes in the information available to the players of a symmetric common-value Tullock contest with incomplete information affect their payoffs and their incentives to exert effort. For the class of contests where players' state dependent cost of effort is multiplicative, we show...

The inefficiency of competitive markets for lemons raises fundamental questions about market performance and the role of policy intervention. We study the performance of dynamic markets, and show that when the time horizon is finite decentralized markets perform better and high quality is more...