What has been the effect of the shift in emerging market capital flows toward private sector borrowers? Are emerging market capital flows more efficient? If not, can controls on capital flows improve welfare? This paper shows that the answers depend on the form of default risk. When private loans are enforceable, but there is the risk that the government will default on behalf of all residents,...

Strategy-proof allocation of a ®nite number of indivisible goods among a ®nite number of individuals is considered. The main result is that in a pure distributional case, a mechanism is strategy-proof, nonbossy and neutral if and only if it is serially dictatorial. If the indivisible goods are initially owned by the individuals, a mechanism is strategy-proof, individually rational and Pareto co...

We derive optimal strategies for a bidding agent that participates in multiple, simultaneous second-price auctions with perfect substitutes. We prove that, if everyone else bids locally in a single auction, the global bidder should always place non-zero bids in all available auctions, provided there are no budget constraints. With a budget, however, the optimal strategy is to bid locally if thi...

In this paper parallel universes are defined by their relation to multi-criteria optimization combined with an explicit or implicit link for the unambiguous identification of an optimum. As an explicit link function the desirability index is introduced. Desirabilities are also used for restricting the Pareto set to desired parts.

The classic Gibbard-Satterthwaite theorem says that every strategy-proof voting rule with at least three possible candidates must be dictatorial. In [McL11], McLennan showed that a similar impossibility result holds even if we consider a weaker notion of strategy-proofness where voters believe that the other voters’ preferences are i.i.d. (independent and identically distributed): If an anonymo...

Can the Pareto criterion guide policymakers who do not know the true model of the economy? If policymakers specify ex ante preferences for agents, then Pareto improvements from a distorted status quo are usually possible, and with more commodities than states, one can implement almost every Pareto optimum. Unlike the standard second welfare theorem, planners cannot dictate allocations: agents m...

Government Debt as Insurance against Macroeconomic Risk Is there a role for debt beyond curing overaccumulation of capital? Does dynamic efficiency and the infeasibility of debt Ponzi schemes eliminate any Pareto-improving role for a government in a competitive economy with complete markets? Is there an optimal maturity structure of public debt? Using a stochastic Diamond OLG model, we tackle t...