Vega-Redondo (1997) showed that imitation leads to the Walrasian outcome in Cournot Oligopoly. We generalize his result to aggregative quasi-submodular games. Examples are the Cournot Oligopoly, Bertrand games with differentiated complementary products, Common- Pool Resource games, Rent-Seeking...

Splitting leagues or tournaments seems to be puzzling when agents are homogeneous and splitting leads to a negative competition effect. However, it can be shown that the principal can nevertheless benefit from splitting. First, splitting can be used as a divide-and-rule strategy by the principal...

In this paper we deal with voluntary and compulsory redistribution in an economy where the enforcement of property rights is costly. Two agents engage in a common-pool contest and two types of potential distortions arise: the waste of resources in the contest and the dilution of incentives to...

In multiple-task hidden-action models, the (mis-)allocation of effort may play an important role for benefit creation. Signals which capture this benefit and which are used in incentive schemes should thus not only be judged by the noise and the associated costs but also by the mis-allocation...

The present paper aims to contribute to the literature on the foundations of incomplete contracts by providing conditions under which simple delegation of authority is the solution to the complete-contracting problem of the parties. We consider a hold-up framework where both parties profit from...

We present a common value mechanism design model for an informed principal where only the principal has private information, but her one-dimensional private information is allowed to be distributed according to any probability measure. For this model we characterize the set of pure-strategy...

This paper deals with double lobbying: several bureaucrats participate in joint lobbying to get a high total departmental budget, but they also engage in antagonistic lobbying to reap as high a share of the total budget as possible. The antagonistic lobbying constitutes a contest among the...

In this paper we show that deposit insurance can increase the probability of systemic banking crisis, even though it is optimally designed and its premium is risk related. This is driven by the possibility of contagious bank runs. We prove that contagion only occurs if the correlation between...

The Benefit and Cost of Winner Picking: Redistribution Vs Incentives