We study binary action network games with strategic complementarities. An agent acts if the aggregate social influence of her friends exceeds a transfer levied on the agent by a principal. The principal seeks to maximize her revenue while inducing everyone to act in a unique equilibrium. We...

This paper examines how the effort choices of workers within the same firm interact with each other. In contrast to the existing literature, we show that workers can affect the productivity of their co-workers based on income maximization considerations, rather than relying on behavioral...

This paper examines the occurrence and fragility of information cascades in laboratory experiments. One group of low informed subjects make predictions in sequence. In a matched pairs design, another set of high informed subjects observe the decisions of the first group and make predictions....

Consumer prices in many markets are persistently dispersed both across retail outlets and over time. While the cross sectional distribution of prices is stable, individual stores change their position in the distribution over time. It is a challenge to model oligopolistic price adjustment to...

Conventional wisdom suggests that an increase in monetary incentives should induce agents to exert higher effort. In this paper, however, we demonstrate that this may not hold in team settings. In the context of sequential team production with positive externalities between agents, incentive...

We characterize the set of extreme points of monotonic functions that are either majorized by a given function f or themselves majorize f and show that these extreme points play a crucial role in many economic design problems. Our main results show that each extreme point is uniquely...

We briefly survey several insights about value and revenue maximization in multi-object auctions and apply them to the German (and Austrian) UMTS auction. In particular, we discuss in detail the exposure problem that caused firms in Germany to pay almost Euro 20 billion for nothing.

We use the tools of mechanism design, combined with the theory of risk measures, to analyze how a cash constrained owner of an asset with known stochastic returns raises capital from a population of investors that differ in their risk aversion and budget constraints. The issuer partitions the...

We study an elimination tournament with heterogenous contestants whose ability is common-knowledge. Each pair-wise match is modeled as an all-pay auction where the winner gets the right to compete at the next round. Equilibrium efforts are in mixed strategies, yielding rather complex play...

Lecture on the first SFB/TR 15 meeting, Gummersbach, July, 18 - 20, 2004: We analyze the allocation of priority in queues via simple bidding mechanisms. In our model, the stochastically arriving customers are privately informed about their own processing time. They make bids upon arrival at a...