In competitive procurement auctions, bids often have the form of unit-price contracts (UPCs). We show that optimal bidding behavior in UPC auctions is typically nonmonotonic and therefore may lead to inefficient allocations. However, UPC auctions may still be desirable for the buyer when...

We study the possibility of efficient trade with informationally interdependent valuations. In a model based on the bilateral trade situation studied in Myerson and Satterthwaite (1983) efficient trade is only possible in trivial cases where the seller's valuation always exceeds the buyer's...

In a model of bilateral trade under asymmetric information, Myerson and Satterthwaite (1983) show that there does not exist any bargaining game which results in an efficient outcome. We analyse a model with multiple sources of uncertainty, some of which is privately known before bargaining...

We analyse the bidding for unit-price contracts, a very common procurement auction. With a unit price contract, not the provision of the good but the employment of several kinds of inputs is priced. The seller charges a unit price for the employed quantity of each input. To select one seller, a...

We analyze the possibility of efficient trade with informationally interdependent valuations and with a dispersed ownership. A crucial role is played by the sign of the derivatives that measure how valuation functions depend on others’ signals. If valuations are increasing functions of other...

In competitive procurement auctions, bids often have the form of unit-price contracts (UPCs). We show that optimal bidding behavior in UPC auctions is typically non-monotonic, and therefore may lead to inefficient allocations. However, UPC auctions may still be desirable for the buyer when...

We analyse the revenue-maximising allocation of a single good of finite lifetime where the lifetime can be split up into a lease for an initial period and follow-up leases for the remaining time. The holder of the initial lease has private information about his willingness to pay. The...

Interest rate derivatives are among the most actively traded financial instruments in the main currency areas. With values of positions reacting immediately to the underlying index of daily interbank rates, manipulation has become an increasing challenge for the operational implementation of...