We study sealed-bid auctions with financial externalities, i.e., auctions in which losers' utilities depend on how much the winner pays.In the unique symmetric equilibrium of the first-price sealed-bid auction (FPSB), larger financial externalities result in lower bids and in a lower expected...

In this paper, we analyze a lobby game, modelled as an all-pay auction in which interest groups submit bids in order to obtain a political prize.The bids are restricted to be below a cap imposed by the government.For both an incomplete and a complete information setting we show the following...

We construct optimal auctions when bidders face financial externalities.In a Coasean World, in which the seller cannot prevent a perfect resale market, nor withhold the object, the lowest-price all-pay auction is optimal.In a Myersonean World, in which the seller can both prevent resale after...

Mediation is a conflict resolution method in which a third neutral party provides assistance to the conflict parties.The process of mediation as well as any solution to the conflict arising from it is implemented only by the consent of all conflict parties.It is the role of a mediator to...

We isolate strategic and non-strategic motivations of sanctioning in a repeated public goods game. In two experimental treatments, subjects play the public goods game with the possibility to sanction others. In the STANDARD sanctions treatment, each subject learns about the sanctions received in...

In this paper, we address the concept of trust by combining (i) the self-reported trust and belief in trustworthiness of others from a general unpaid questionnaire, (ii) choices made in a social valuation task designed to measure subjects' distributional preferences, (iii) strategies submitted...