Appendix is available at: 'https://ssrn.com/abstract=3034480' https://ssrn.com/abstract=3034480Perpetual licenses incent owners incentives to invest in the common value of public resources, but impede efficient reallocation of resources to higher-valued entrants. Short-term licenses improve...

We study the impact of short-sale constraints on market prices and liquidity in imperfectly competitive markets in which market-makers have market power. We show that, with or without information asymmetry, short-sale constraints decrease bid prices, but increase bid-ask spreads and...

This paper investigates the welfare effects of private investments prior to trade. A seller of a durable good can privately invest on changing its quality. After the investment, she receives a take-it-or-leave-it offer from a buyer. Both the seller and the buyer value more goods of higher...

Pricing decisions are increasingly in the “hands” of artificial algorithms. Scholars and competition authorities have voiced concerns that those algorithms are capable of sustaining collusive outcomes more effectively than human decision makers. If this is so, then our traditional policy...

We consider a general scheme to construct Bayesian incentive compatible mechanisms using a suitable 'variable mechanism parametrization.' The key idea is to perturb a given direct mechanism, which might not be truth revealing, introducing sufficient variability as a function of agents'...

This paper studies the monopolist choice of the number of varieties (n) in a quality differentiation model, when developing varieties is costly. We do not model the marginal cost of developing varieties but concentrate on the marginal benefit side. We prove that the marginal benefit of adding...

We present a market microstructure model to examine specialist's strategic participation decisions in a security market where there are noise traders, limit order traders, an insider and a specialist. We argue that the specialist's participation rate depends on the depth of the limit book and...

A seller of an item faces a potential buyer whose valuation of the item depends on two private signals. It is well known that when there are informational externalities and the buyer's private signals arrive all at once, it is impossible to implement an efficient sale. I show that if the buyer's...

The article shows that heterogeneous incomplete private information can explain the limited existence of guaranteed renewable health insurance (GR) contracts in an otherwise frictionless markets. We derive a unique equilibrium that can be of the form that either only a portion of the population...