We modify the dynamic pivot mechanism of Bergemann and Välimäki (Econometrica, 2010) in such a way that lump-sum fees are collected from the players. We show that the modified mechanism satisfies ex-ante budget balance as well as ex-post efficiency, periodic ex-post incentive compatibility, and periodic ex-post individual rationality, as long as the Markov chain representing the evolution of pl...

We consider a frictional market where buyers are uncoordinated and sellers cannot commit ex-ante to either a per-unit price or quantity of a divisible good. Sellers then can exploit their local monopoly power by adjusting prices or quantities once the local demand is realized. We find that when sellers can adjust quantities ex-post, there exists a unique symmetric equilibrium where the increase...

In a principal-agent environment with moral hazard and symmetric information, having or acquiring a more informative technology lowers the cost to implement a given action. Contracting may occur after or before the principal learns her technology. We show that when the principal has or will acquire private information about her technology, (i) with ex post contracting, the value of information ...

The paper studies bilateral contracting with endogenous property rights. Players engage in costly ex post adjustment of ex ante contract. After ex ante agreement on surplus sharing, players invest irreversibly production. Player costs of altering ex ante contract are transaction costs of three kinds: measurement, information and enforcement costs. Each player chooses an action which incurs tran...