Two bookmakers compete in Bertrand fashion while setting odds on the outcomes of a sporting contest where an influential punter (or betting syndicate) may bribe some player(s) to fix the contest. Zero profit and bribe prevention may not always hold together. When the influential punter is quite...

We show that in markets with asymmetric information, even if there is full agreement on the choice of optimal information quality, entrusting the choice of (unverifiable) public information quality to traders who benefit from such information leads to inefficiencies. However, delegation of...

This paper studies optimal auction design with asymmetric linear financial externalities among bidders. When the matrix Γ that relates biddersʼ payoffs to their payments is nonsingular, the payment-related component in the design objective must equal a unique linear combination of its...

We examine auction design in a context where symmetrically informed adaptive agents with common valuations learn to bid for a good. Despite the absence of private valuations, asymmetric information, or risk aversion, bidder strategies do not converge to the Bertrand–Nash equilibrium strategies...

We address the common scenario where a group of agents wants to divide a set of items fairly, and at the same time seeks to optimize a global goal. Suppose that each item is a task and we want to find an allocation that minimizes the completion time of the last task in an envy-free manner, where...

In the basic adverse selection model, a seller makes a contract offer to a privately informed buyer. A fundamental hypothesis of incentive theory is that the seller may want to offer a menu of contracts to separate the buyer types. In the good state of nature, total surplus is not different from...

Prosper, today the second largest social lending marketplace with nearly 1.5 million members and $380 million in funded loans, employed an auction mechanism amongst lenders to finance each borrower's loan until 2010. Given that a basic premise of social lending is cheap loans for borrowers, how...

We study the second best in a single unit sale to two bidders. This is the allocation that maximizes the expected social surplus subject to the biddersʼ incentive compatible constraints when the first best is not implementable. We prove that Maskinʼs (1992) result that any first best...

I study the ex-ante efficient allocation of a set of quality-heterogeneous objects to a number of heterogeneous risk-neutral agents. Agents have independent private values, which represent the maximum cost they are willing to sustain to obtain an object of unitary quality. The designer faces a...

We propose a smooth multibidding mechanism for environments where a group of agents have to choose one out of several projects. Our proposal is related to the multibidding mechanism (Pérez-Castrillo and Wettstein, 2002) but it is “smoother” in the sense that small variations in an agentʼs...