This paper addresses the following question: Does competition enhance efficiency in markets with quality uncertainty? Using the mechanism design methodology, we characterize the maximal achievable level of efficiency in such markets, and then use this characterization to analyze how maximal...

This paper studies the impact of competition on the degree of inefficiency in lemons markets. More precisely, we characterize the second-best mechanism (i.e., the optimal mechanism with private information) in a stylized lemons market with finite numbers of buyers and sellers. We then study the...

We identify a sufficient class of coalitional form games with transferable utility for which prenucleolus coincides with the Shapley value. We then apply our result to simple games and to generalized queueing games.

We examine the tradeoffs between two variants of group strategyproofness, efficiency and budget balance in queueing models. In general, group strategyproofness is incompatible with efficiency and budget balance. Weakening budget balance to feasibility, we show that the incompatibility persists...

This paper develops a model of child custody based on an incomplete-contract approach to the allocation of property rights. Because of the presence of transaction costs in marriage, altruistic parents cannot contract upon the investments they make into their children, but can reduce the...

This paper is concerned with the persistence of inefficient institutions. Why are they not replaced by more effcient ones? What and/or who prevents such change? We provide an answer to these questions based on two key ideas. The principal idea is that institutional change on an issue may...

This paper studies the origins of one of the most basic of property rights, namely, the right of an individual or an organization to the fruits of its labour. My objective is to address the questions of why, when and how this property right can emerge and be made secure. I develop a model of the...