We consider a two-player contest for a prize of common but uncertain value. We show that less resources are spent in equilibrium if one party is privately informed about the value of a prize than if either both agents are informed or neither agent is informed. Furthermore, the uninformed agent...

We derive the optimal incentive compatible and individually rational mechanisms to reallocate arbitrary given ownership shares among a set of agents. These mechanisms are optimal in the sense that they maximize social surplus of the final allocation subject to the aforementioned constraints and...

Despite negative experiences with auctioning off subsidies for renewable energy in some countries, tenders are increasingly used today. We develop a reverse auction which accounts for particularities of intermittent renewable energy sources. Determining the quantity, demanded by the regulator,...

We develop a novel theory of real estate foreclosure auctions, which have the special feature that the lender acts as a seller for low and as a buyer for high prices. The theory yields several empirically testable predictions concerning the strategic behavior of the agents, both under symmetric...

We study experimentally the effect of bargaining power in sequential trading mechanisms that offer the possibility to trade at a fixed price before an auction. In the "Buy-It-Now" format, the seller offers a price prior to the auction; whereas in the "Sell-It-No" format, it is the buyer. Both...

We study cheap-talk pre-play communication in the static all-pay auctions. For the case of two bidders, all correlated and communication equilibria are payoff equivalent to the Nash equilibrium if there is no reserve price, or if it is commonly known that one bidder has a strictly higher value....

We analyze the doping behavior of heterogeneous athletes in an environment of private information. In a n-player strategic game, modeled as an all-pay auction, each athlete has private information about his actual physical ability and choses the amount of performance-enhancing drugs. The use of...

We study experimentally the effect of bargaining power in two sequential mechanisms that offer the possibility to trade at a fixed price before an auction. In the "Buy-It-Now" format, the seller has the bargaining power and offers a price prior to the auction; whereas in the "Sell-It-Now"...

Potential bidders respond to a seller's choice of auction mechanism for a common-value or affiliated-values asset by endogenous decisions whether to incur an information-acquisition cost (and observe a private estimate), or forgo competing. Privately informed participants decide whether to incur...