This paper studies competitive allocations under adverse selection. We first provide a general necessary and sufficient condition for entry on an inactive market to be unprofitable. then use this result characterize, active market, unique budget-balanced allocation implemented by tariff making additional trades with entrant Motivated the recursive structure of allocation, we finally show that i...

When firms collude and charge supracompetitive prices, consumers can bring antitrust lawsuits against the firms. litigation cost is low, accept as just another of doing business, whereas when high, lower price to deter litigation. Class action modeled a mechanism that allows plaintiffs attorneys obtain economies scale. We show class actions, firms’ incentive block them, may or not be socially d...

We study a dynamic stopping game between principal and an agent. The gradually learns about the agent's private type from noisy performance measure that can be manipulated by agent via costly hidden action. fully characterize unique Markov equilibrium of this game. find terminations/market crashes are often preceded spike in manipulation intensity (expected) performance. Moreover, due to endoge...

We provide predictions for DSGE models with incomplete information that are robust across structures. Our approach maps an incomplete-information model into a full-information economy time-varying expectation wedges and provides conditions ensure the rationalizable by some structure. Using our approach, we quantify potential importance of as source business cycle fluctuations in otherwise frict...

We examine a setup where two agents allocate fixed budget between public goods in areas. The may be biased to one area, which is their private information. Without communication, the funds are allocated inefficiently, resulting gaps and duplication good provision. Direct communication ineffective cannot resolve coordination failure even when potential biases negligible. Coordination can improve...

In this paper we study the optimal file-sharing mechanism in a peer-to-peer network with a mechanism design perspective. This mechanism improves upon existing incentive schemes. In particular, we show that peer-approved scheme is never optimal and service-quality scheme is optimal only under certain circumstances. Moreover, we find that the optimal mechanism can be implemented by a mixture of p...

In two-sided multi-unit auctions having a variety of payment rules, including uniform-price and discriminatory auctions, a monotone pure strategy equilibrium (MPSE) exists when bidders are risk-neutral with independent multi-dimensional types and interdependent values. In fact, all mixed strategy equilibria are ex post allocationand interim expected payment-equivalent to MPSE. Thus, for standar...