We study the optimal auction problem with participation costs in the symmetric independent private values setting, where bidders know their valuations when they make independent participation decisions. After characterizing the optimal auction in terms of participation cutoffs, we provide an...

I study a multi-player mechanism design problem where the players are able to collude. I characterize the extent that the principal can link the compensation level of one of these players to the production performance of the other. I use this characterization result to identify the optimal...

We study how competing matchmakers use prices to sort participants into search markets, where they form random pairwise matches, and how equilibrium outcomes compare with monopoly in terms of prices, search market structure and sorting efficiency. The role of prices to facilitate sorting is...

We model, using evolutionary game theory, the implications of endogenous determination of preferences over the outcomes of any given two-player normal form game, G. We consider a large population randomly and repeatedly matched to play G. Each individual has a preference relation over the...

Technical supplement to the paper forthcoming in Rand Journal of Economics.

We study an adverse selection problem, where an agent is able to understate his productivity, but not allowed to overstate it. The solution to this problem is generally different than the solution to the standard problem, where no restriction is made on the statements of the agent. We identify a...

We study a mechanism design problem in which players can take part in a mechanism to coordinate their actions in a default game. By refusing to participate in the mechanism, a player can revert to playing the default game non-cooperatively. We show with an example that some allocation rules are...

Though individuals prefer to join groups with high quality peers, there are also advantages from being high up in the pecking order within a group. We show that sorting of agents in this environment results in an overlapping interval structure in the type space. Segregation and mixing coexist in...

We provide a simple proof of the equivalence between ex ante and ex post budget balance constraints in Bayesian mechanism design with independent types when participation decisions are made at the interim stage. The result is given an interpretation in terms of efficient allocation of risk.