We consider an auction setting in which bidders, even if they fail to obtain the good, care about the price paid by the winner. We study the impact of these price externalities on the first-price auction and the second-price auction in a symmetric information framework. We establish a distinction between price externalities that do not depend on the identity of the winner and price externalitie...

This paper studies the effect of terrorist attacks on the internal structure of cities. We develop an urban framework with capital structures suitable for the study of this question and analyze the long and short term implications of this type of events. In the long run, the analysis shows that a terrorist attack will affect urban structure only modestly, relative to the potentially large decre...

Efficient regulation of the commons requires information about the regulated firms that is rarely available to regulators (e.g., cost of pollution abatement). Different mechanisms have been proposed for inducing firms to reveal their private information but for reasons I discuss in the paper, I find these mechanisms of limited use. I propose a much simpler mechanism that implements the first-be...

In this paper we obtain the quality and the level of production that a certain sector would have if completely unregulated. We use a vertical differentiation model with variable costs. The market outcome has been compared to the social planner solution, when this accounts for the external costs that the production activity provokes on resident households and for the possibility that an importan...

Article history: Received 17 December 2014 Received in revised form 26 August 2015 Accepted 24 November 2015 Available online 18 December 2015 The growth of fossil fuel power production and the consequent increase in the level of carbon dioxide (CO2) emissions have set off an alarm signal worldwide. Different policies have been implemented to incentivize the development of renewable energy sour...

We examine regulations for managing pest resistance to pesticide varieties in a temporally and spatially explicit framework. We compare the performance of the EPA’s mandatory refuges and a tax (or subsidy) on the pesticide variety under several biological assumptions on pest mobility and the heterogeneity of farmers’ pest vulnerability. We find that only the tax (or subsidy) restores efficiency...

We study experimentally whether anti-corruption policies with a focus on bribery might be insufficient to uncover more subtle ways of gaining an unfair advantage. In particular, we investigate whether an implicit agreement to exchange favors between a decision-maker and a lobbying party serves as a legal substitute for corruption. Due to the obvious lack of field data on these activities, the l...