We extend Myerson's (1981) model by allowing for uncertainty about the number of bidders. In such extension the Revenue Equivalence Theorem still holds and the optimal allocation rule remains the same. Hence, the optimal auction can be implemented with an appropriate reserve price. Nonetheless,...

This paper constructs a model of directed search in the interbank market and tests its empirical implications with data from the Libor benchmark setting process. Interbanking rates were until recently based on judgmental estimates of borrowing costs published by a panel of banks. We interpret...

We apply an indirect evolutionary approach to player’ perceived prize valuations in contests. Evolution in finite populations leads to preferences that overstate the prize’s material value and induce overexpenditure. We establish an equivalence between the behavior evolutionarily stable...