Using a network approach we provide a characterization of a separating equilibrium for standard signaling games where the senders payoff function is quasi-linear. Given a strategy of the sender, we construct a network where the node set and the length between two nodes are the set of the senders...

Existing evidence shows that decision-makers’ social ties to internal co-workers can lead to reduced firm performance. In this paper, we show that decision-makers’ social ties to external transaction partners can also hurt firm performance. Specifically, we use 34 years of data from the...

This paper studies collusion in one-shot auctions, where a buyer can bribe his competitors into lowering their bids. We modify the single-unit Vickrey auction to incite deviations from the designated-winner scenario and thus undermine collusion. The construction of mechanism does not require the...

This paper introduces a virtually efficient mechanism in a setting with sequentially arriving agents who hold informative signals about future types. To reveal the information the principal organises betting on future type reports. An agent’s betting reward depends on how accurately the prior...

This paper introduces banks into a dynamic stochastic general equilibrium model by featuring asymmetric information as the underlying friction for banking. Asymmetric information about asset qualities causes a lemons problem in the asset market. In this environment, banks can issue liquid...

This paper considers the effects of the opportunity to change partners on communication. We experiment a standard cheap talk game where a player observes a private forecast before disclosing it (truthfully or untruthfully) in a message that he/she sends to his/her partner. Two treatments are...

When money was made of gold and silver, individuals faced the problem of determining the intrinsic content of coins in many exchange situations. In this paper we look at a well-documented solution to this problem, and a key institution of the commodity money system: coin assaying. To that goal...

We report on experimental markets for a contingent claim asset that eight subjects traded for nine periods before the state was revealed. There is an informative binary signal that arrives after each of the first eight trading rounds. In our baseline treatment the realization of the signal is...

We study the Lemons Problem when workers have private information on both their skills and their intrinsic motivation. When workers are motivated, ine¢ ciencies due to adverse selection are mitigated and a change in salaries may have unexpected consequences. With a su¢ ciently strong and...

We study optimal contracts offered by two firms competing for the exclusive services of one worker, who is privately informed about her ability and her motivation. Firms differ both in their production technology and in the mission they pursue and a motivated worker is keen to be hired by the...