This paper studies the mechanism design problem for the class of Bayesian environments where agents do care for the well-being of others. For these environments, we fully characterize interim efficient mechanisms and examine their properties. This set of mechanisms is compelling, since interim efficient mechanisms are the best in the sense that there is no other mechanism which generates unanim...

In this paper the author proves that the Expected Net Future Value (ENFV) criterion can lead a risk neutral social planner to reject projects that increase expected utility. By contrast, the Expected Net Present Value (ENPV) rule correctly identifies the economic value of the project. While the ENFV increases with uncertainty over future interest rates, the expected utility decreases because of...

This paper establishes that the profit-seeking activities of private intermediaries can ensure Pareto efficiency in the standard pure-exchange monetary overlapping generations economy without the need for government monetary or fiscal policy intervention. Moreover, these profit-seeking activities are shown to rule out all aperiodic and kperiodic cycles for k greater than 2. Contrary to much rec...

This paper deals with the problem of incentive mechanism design in non-convex production economies when production sets and preferences both are unknown to the designer. We consider Nash-implementation of loss-free, average cost, marginal cost, voluntary trading, and quantity-taking pricing equilibrium allocations in economies involving increasing returns to scale or more general types of non-c...

In this paper we present an application of the auction mechanisms to the allocation of a chore (a bad) to one of the bidders belonging to a given set B. We also discuss an extension of such an application to the allocation of a set of chores among an initial set of bidders B. The paper aims at showing how the classic auction mechanism can be modified and adapted for the allocation of bads (chor...

The planner wants to give k identical, indivisible objects to the top k valuation agents at zero costs. Each agent knows her own valuation of the object and whether it is among the top k. Modify the (k + 1)st-price sealed-bid auction by introducing a small participation fee and the option not to participate in it. This simple mechanism implements the desired outcome in iteratively undominated s...

This article analyzes concerns about market power and inequality in a model with multiple sectors, heterogeneous abilities, endogenous labor supply, nonlinear income taxation. Proportional markups no profit dissipation have effect on the economy, policy that reduces nonproportional markup raises (lowers) welfare when it is higher (lower) than weighted average of other markups. With proportional...

Climate change not only impacts production and market consumption but also the relative scarcity of nonmarket goods, such as environmental amenities. We study fundamental drivers resulting price changes, their potential magnitude, implications for climate policy in Nordhaus’s Dynamic Integrated Climate-Economy (DICE) model, thereby addressing one its key criticisms. propose plausible ranges the...

We synthesize and review retrospective analyses of federal air quality regulations to examine the contributions Clean Air Act (CAA) vast improvements seen since 1970. Geographic heterogeneity in stringency affects emissions, public health, compliance costs, employment. Cap-and-trade has delivered greater emission reductions at lower cost than conventional mandates, yet fallen short textbook ide...