We study intermediaries who seek to maximize gains from trade in bilateral negotiations. Intermediaries are players: they cannot commit to act against their objective function and deny, in some cases, trade they believe to be beneficial. This impairs their ability to assist the parties relative...

Public projects typically generate both monetary revenue and social benefits that cannot be monetized. We show that a government concerned with the credit rating of its debt should put different discount rates on these two aspects. The credit rating reflects the probability of default on the...

This paper begins to explore behavioral mechanism design, replacing equilibrium by a model based on "level-k" thinking, which has strong support in experiments. In representative examples, we consider optimal sealed-bid auctions with two symmetric bidders who have independent private values,...

This paper shows that the phenomenon of multiple equilibria can be fragile to the introduction of aggregate shocks. We examine a standard dynamic model of sectoral choice with external increasing returns. Without shocks, the outcome is indeterminate: there are multiple rational expectations...

We study a private-values buyer-seller problem with multiple objects. Valuations are binary and i.i.d. We construct mechanisms that span the set of all Pareto-efficient outcomes. The induced trading rules for objects are linked in a simple way.