Discrete public goods with incomplete information

We analyze simultaneous discrete public good games wi.th incomplete information and continuous contributions. To use the terminology of Admati and Perry (1991). we consider comribution and subscription games. In the former. comrioutions are :1ot rcfunded if the project is not completed. while in thp. iatter they are. For the special case whp.re provision by a single player is possible we show the existence of an equilibrium in Doth cootribution and subscription games where a player decides to provide the good by himself. For the case where is not feasible for a single player to provide the good by himself, we show that any equilibriwn of both games is inefficient. WE also provide a sufficient condition for "contributing zero" to be the unique equilibrium of the contribution garoe with n players and characterize e

Discrete public goods with incomplete information

We analyze simultaneous discrete public good games with incomplete information and continuous contributions. To use the tenninology of Admati and Perry (1991), we consider contribution and subscription games. In the former, contributions are not refunded ifthe project is not completed, while in the latter they are. For the special case where provision by a single player is possible we show the existence of an equihbrium in both contnbution and subscription games where a player decides to provide the good by himself. For the case where is not feasible for a single player to provide the good by himself: we show that there exist equilibria of the subscription game where each participant pays the same amount. Moreover, using the technical apparatus from Myerson (1981) we show that neither the subscription nor the contribution games admit ex-post eÁ cient equibbria. hl addition. we provide a suÁ cient condition for êontributing zero 'to be the unique equihbrium of the contnbution game with n players.

Mobility, information, and bequest : the other side of the equal division puzzle

There is substantial empirical evidence that parental bequests to their children are typically equal in the US – a regularity inconsistent with the predictions of standard optimizing bequest models. The prior explanation for this puzzle is parents’ desire to signal equal affection given children’s incomplete information of parental preferences. However, parents also have incomplete information regarding children and the implications of this side of the information set have not previously been considered. Using a strategic bequest framework we show that when parents have sufficient uncertainty regarding children’s returns to relocation a separating equilibrium in which parents reward attentive heirs with larger bequests is precluded. We argue that such uncertainty is consistent with conditions in the contemporary US.

Nature's choice? a study of the displacement of incumbents in elections

Como choques econômicos afetam eleições em democracias? Usando dados eleitorais do Congresso dos Estados Unidos, eu testo se choques adversos podem afetar desigualmente partidos incumbentes e oponentes. Esse efeito é identificado, entre vários procedimentos, por uma regressão em descontinuidade. Eu considero possibilidades teóricas para esse efeito, quando cidadãos não conseguem observar perfeitamente se a falta de bens públicos é devido a um choque adverso, ou a consumo privado do político. Quando o choque é observável, não há efeito; enquanto se não fosse, haveria. As evidências empíricas são consistentes com a teoria.

All-pay auctions with endogenous asymmetries

We study N-bidders, asymmetric all-pay auctions under incomplete information. First, we solve for the equilibrium of a parametric model. Each bidder’s valuation is independently drawn from an uniform [0, αi] where the parameter αi may vary across bidders. In this game, asymmetries are exogenously given. Next, a two-stage game where asymmetries are endogenously generated is studied. At the first stage, each bidder chooses the level of an observable, costly, value-enhancing action. The second stage is the bidding sub-game, whose equilibrium is simply the equilibrium of the, previously analyzed, game with exogenous asymmetries. Finally, natural applications of the all pay-auction in the context of political lobbying are considered: the effects of excluding bidders, as well as, the impact of caps on bids.

Bias and size effects of price-comparison search engines : theory and experimental evidence

We analyze the impact on consumer prices of the size and bias of price comparison search engines. In the context of a model related to Burdett and Judd (1983) and Varian (1980), we develop and test experimentally several theoretical predictions. The experimental results confirm the model’s predictions regarding the impact of the number of firms, and the type of bias of the search engine, but reject the model’s predictions regarding changes in the size of the index. The explanatory power of an econometric model for the price distributions is significantly improved when variables accounting for risk attitudes are introduced.

A simple analysis of the U.S. emission permits auctions

We examine a stylized version of EPA auctions when agents know the list of values of sellers and buyers. Sellers and buyers behave strategically. We show that there are two types of equilibria: inefficient equilibria where no goods are traded and efficient equilibria where alI exchange occurs at a uniform price. We also provide examples of the EPA auction game under incomplete information when the uniform price equilibrium holds and when it does not hold. When the uniform price equilibrium holds, sellers shade their bids up and buyers shade their bids down. In the example where the uniform price equilibrium does not hold, both buyers and sellers shade their bids down in an equilibrium.

Macroeconomic announcements, price discovery, and order flow efects in the stock market: evidence from incomplete data and multiple financial markets

This paper investigates heterogeneity in the market assessment of public macro- economic announcements by exploring (jointly) two main mechanisms through which macroeconomic news might enter stock prices: instantaneous fundamental news im- pacts consistent with the asset pricing view of symmetric information, and permanent order ow e¤ects consistent with a microstructure view of asymmetric information related to heterogeneous interpretation of public news. Theoretical motivation and empirical evidence for the operation of both mechanisms are presented. Signi cant in- stantaneous news impacts are detected for news related to real activity (including em- ployment), investment, in ation, and monetary policy; however, signi cant order ow e¤ects are also observed on employment announcement days. A multi-market analysis suggests that these asymmetric information e¤ects come from uncertainty about long term interest rates due to heterogeneous assessments of future Fed responses to em- ployment shocks.