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We develop tests for common values at first-price sealed-bid auctions. Our tests are nonparametric, require observations only of the bids submitted at each auction, and are based on the fact that the "winner's curse" arises only in common values auctions. The tests build on recently developed...
Persistent link: https://www.econbiz.de/10005762657
requisite funding for these experiments. The repeated interaction gives rise to a dynamic agency cost—the more lucrative is the … switch to the worst continuation equilibrium attenuates the dynamic agency cost. …
Persistent link: https://www.econbiz.de/10011265334
requisite funding for these experiments. The repeated interaction gives rise to a dynamic agency cost — the more lucrative is … switch to the worst continuation equilibrium attenuates the dynamic agency cost. …
Persistent link: https://www.econbiz.de/10010895676
expensive for the principal to incentivize the agent, giving rise to a dynamic agency cost. As a result, constrained efficient …
Persistent link: https://www.econbiz.de/10005064218
repeated interaction gives rise to a dynamic agency cost -- the more lucrative is the agent’s stream of future rents following … it is most valuable, while the eventual switch to the worst continuation equilibrium attenuates the dynamic agency cost. …
Persistent link: https://www.econbiz.de/10009645612
In our previous paper we built a general equilibrium model of default and punishment in which equilibrium always exists and endogenously determines asset promises, penalties, and sales constraints. In this paper we interpret the endogenous sales constraints as equilibrium signals. By...
Persistent link: https://www.econbiz.de/10005463898
Market participants' risk attitudes, wealth and portfolio composition influence their positions in a pegged foreign currency and, therefore, may have important effects on the sustainability of currency pegs. We analyze such effects in a global game model of currency crises with continuous action...
Persistent link: https://www.econbiz.de/10005463907
We extend the standard model of general equilibrium with incomplete markets to allow for default and punishment by thinking of assets as pools. The equilibrating variables include expected delivery rates, along with the usual prices of assets and commodities. By reinterpreting the variables, our...
Persistent link: https://www.econbiz.de/10005463908
A decision maker is asked to express her beliefs by assigning probabilities to certain possible states. We focus on the relationship between her database and her beliefs. We show that, if beliefs given a union of two databases are a convex combination of beliefs given each of the databases, the...
Persistent link: https://www.econbiz.de/10005463949
An agent is asked to assess a real-valued variable y based on certain characteristics x=(x^{1},...,x^{m}), and on a database consisting of n observations of (x^{1},...,x^{m},y). A possible approach to combine past observations of x and y with the current values of x to generate an assessment of...
Persistent link: https://www.econbiz.de/10005463969