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These notes examine the problem of how to extend envelope theorems to infinite-horizon dynamic mechanism design settings, with an application to the design of bandit auctions.
Persistent link: https://www.econbiz.de/10010282877
We examine the design of incentive-compatible screening mechanisms for dynamic environments in which the agents' types follow a (possibly non-Markov) stochastic process, decisions may be made over time and may affect the type process, and payoffs need not be time-separable. We derive a formula...
Persistent link: https://www.econbiz.de/10010282878
Uniform-price auctions of a divisible good in fixed supply admit underpricing equilibria, where bidders submit high inframarginal bids to prevent competition on prices. The seller can obstruct this behavior by tilting her supply schedule and making the amount of divisible good on offer change...
Persistent link: https://www.econbiz.de/10010282884
I study the properties of optimal long-term contracts in an environment in which the agent's type evolves stochastically over time. The model stylizes a buyer-seller relationship but the results apply quite naturally to many contractual situations including regulation and optimal...
Persistent link: https://www.econbiz.de/10010282889
These notes examine the problem of how to extend envelope theorems to infinite-horizon dynamic mechanism design settings, with an application to the design of bandit auctions.
Persistent link: https://www.econbiz.de/10010282895
This paper considers dynamic games in which multiple principals contract sequentially and non-cooperatively with the same agent. We first show that when contracting is private, i.e. when downstream principals observe neither the mechanisms offered upstream nor the decisions taken in these...
Persistent link: https://www.econbiz.de/10010282900
Global games of regime change-coordination games of incomplete information in which a status quo is abandoned once a sufficiently large fraction of agents attacks it-have been used to study crises phenomena such as currency attacks, bank runs, debt crises, and political change. We extend the...
Persistent link: https://www.econbiz.de/10010282901
In recent years there has been a growing interest in macro models with heterogeneity in information and complementarity in actions. These models deliver promising positive properties, such as heightened inertia and volatility. But they also raise important normative questions, such as whether...
Persistent link: https://www.econbiz.de/10010282908
Persistent link: https://www.econbiz.de/10010282912
The arrival of new, unfamiliar, investment opportunities is often associated with exuberant movements in asset prices and real economic activity. During these episodes of high uncertainty, financial markets look at the real sector for signals about the profitability of the new investment...
Persistent link: https://www.econbiz.de/10010282921