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Public and private learning from prices, strategic substitutability and complementarity, and equilibrium multiplicity

Manzano, Carolina; Vives, Xavier - 2010

We study a general static noisy rational expectations model, where investors have private information about asset payoffs, with common and private components, and about their own exposure to an aggregate risk factor, and derive conditions for existence and uniqueness (or multiplicity) of...

Persistent link: https://www.econbiz.de/10010270646

A game-theoretic foundation for the Wilson equilibrium in competitive insurance markets with adverse selection

Mimra, Wanda; Wambach, Achim - 2011

We extend the seminal Rothschild and Stiglitz (1976) model on competitive insurance markets with asymmetric information in the spirit of Wilson (1977)'s 'anticipatory equilibrium' by introducing an additional stage in which initial contracts can be withdrawn after observation of competitors'...

Persistent link: https://www.econbiz.de/10010275004

Informed-Principal Problem in Mechanisms with Limited Commitment

Kwon, Suehyun - 2019

This paper studies mechanism design with limited commitment where agents have persistent correlated types over the infinite horizon. The mechanism designer now faces the informed-principal problem in addition to usual issues with i.i.d. types. With an infinite horizon and nondurable good, there...

Persistent link: https://www.econbiz.de/10012892075

Optimum commodity taxation in pooling equilibria

Sheshinski, Eytan - 2006

This paper extends the standard model of optimum commodity taxation (Ramsey (1927) and Diamond-Mirrlees (1971)) to a competitive economy in which some markets are inefficient due to asymmetric information. As in most insurance markets, consumers impose varying costs on suppliers but firms cannot...

Persistent link: https://www.econbiz.de/10010263992

Competitive rational expectations equilibria without apology

Kovalenkov, Alexander; Vives, Xavier - 2008

In a standard financial market model with asymmetric information with a finite number N of risk-averse informed traders, competitive rational expectations equilibria provide a good approximation to strategic equilibria as long as N is not too small: equilibrium prices in each situation converge...

Persistent link: https://www.econbiz.de/10010264474

Making sense of non-binding retail-price recommendations

Buehler, Stefan; Gärtner, Dennis L. - 2010

We model non-binding retail-price recommendations (RPRs) as a communication device facilitating coordination in vertical supply relations. Assuming both repeated vertical trade and asymmetric information about production costs, we show that RPRs may be part of a relational contract,...

Persistent link: https://www.econbiz.de/10010270481

Strategic supply function competition with private information

Vives, Xavier - 2008

uncertain costs. It is found that with supply function competition, and in contrast to Bayesian Cournot competition … functions are downward sloping, margins are larger than the Cournot ones, and as we approach the common value case they tend to … equilibrium is privately revealing) while Cournot competition does not. The implication is that with the former the only source of …

Persistent link: https://www.econbiz.de/10010264447

Strategic supply function competition with private information

Vives, Xavier - 2009

or correlation supply functions are downward sloping, margins are larger than the Cournot ones, and as we approach the …

Persistent link: https://www.econbiz.de/10010276986

Auctions vs. negotiations: The case of favoritism

Gretschko, Vitali; Wambach, Achim - 2012

We compare two commonly used mechanisms in procurement: auctions and negotiations. The execution of the procurement mechanism is delegated to an agent of the buyer. The agent has private information about the buyer's preferences and may collude with one of the sellers. We provide a precise...

Persistent link: https://www.econbiz.de/10010291548

Vertical product differentiation when quality is unobservable to buyers

Orosel, Gerhard O.; Zauner, Klaus G. - 2004

We analyze vertical product differentiation in a model where a good's quality is unobservable to buyers before purchase, a continuum of quality levels is technologically feasible, and minimum quality is supplied under competitive conditions. After purchase the true quality of the good is...

Persistent link: https://www.econbiz.de/10010261256