International trade, as a major factor of openness, has made an increasingly significant contribution to economic growth. Chinese international trade has experienced rapid expansion together with its dramatic economic growth which has made the country to target the world as its market. This...

Adverse selection in procurement arises when low-cost bidders are also lowquality suppliers. We propose a mechanism called LoLA which, under some conditions, is the best incentive-compatible mechanism for maximizing either the seller's or the social surplus in the presence of adverse selection....

A firm can merge with one of n potential partners. The owner of each firm has private information about both his firm's stand-alone value and a component of the synergies that would be realized by the merger involving his firm. We characterize incentive-efficient mechanisms in two cases. First,...

We consider the design of the optimal dynamic policy for a firm subject to moral hazard problems. With respect to the existing literature we enrich the model by introducing durable capital with partial irreversibility, which makes the size of the firm a state variable. This allows us to analyze...

Procurement practices are affected by uncertainty regarding suppliers' costs, the nature of competition among suppliers, and uncertainty regarding possible collusion among suppliers. Buyers dissatisfied with bids of incumbent suppliers can cancel their procurements and resolicit bids after...

In general, the result of the elimination of weakly dominated strategies depends on order. We define nice weak dominance. Under nice weak dominance, order does not matter. We identify an important class of games under which nice weak dominance and weak dominance are equivalent, and so order...

This paper uses results of lattice theory, convex analysis, and nonsmooth analysis to establish conditions for the existence of pure-strategy Nash equilibria when payoff functions are continuous but not quasi-concave. A class of economic games for which this theory is important is given.

We consider the dynamic private provision of funds to a project that generates a flow of public benefits. Examples include fund drives for public television or university buildings. The games we study have complete information about payoffs, allow each player to contribute each period, and let...