We analyze the dynamics of a game of sequential bidding in the presence of stochastic scale effects, either economies or diseconomies of scale. We show that economies of scale give rise to declining expected equilibrium prices, whereas the converse is not generally true. Moreover, first- and...

Tripartite contracts between workers, a firm, and an insurance broker Pareto dominate the usual bilateral arrangements if coalitions are not feasible. They do this by allowing the broker to run surpluses over a reservation expected utility in some states and deficits in others. We show that...

In the presence of asymmetric information, adding a public unemployment insurance to labor contracts is potentially Pareto improving. Unfortunately, most successful mechanisms are manipulable by coalitions. This leads us to design coalition incentive compatible unemployment insurance systems....