efficient mechanisms for bilateral trading we consider bargaining problems between one buyer and one seller for a single object the seller s valuation and the buyer s valuation for the object are assumed to be independent random variables and each individual s valuation is unknown to the other we characterize the set of allocation mechanisms that are bayesian incentive compatible and individually rational and show the general impossibility of ex post efficient mechanisms without outside subsidies for a wide class of problems we show how to compute mechanisms that maximize expected total gains from trade and mechanisms that can maximize a broker s expected profit journal of economic literature classification number 026

optimal democratic mechanisms for taxation and public good provision abstract we study the interdependence of optimal tax and expenditure policies an optimal policy requires that information on preferences is made available we first study this problem from a general mechanism design perspective and show that efficiency is possible only if the individuals who decide on public good provision face an own incentive scheme that differs from the tax system we then study democratic mechanisms with the property that tax payers vote over public goods under such a mechanism efficiency cannot be reached and welfare from public good provision declines as the inequality between rich and poor individuals increases

a utilitarian approach to the provision and pricing of excludable public goods the paper studies utilitarian welfare maximization in a model with an excludable public good where individual preferences are private information if inequality aversion is large optimal allocations involve the use of admission fees and exclusion to redistribute resources from people who benefit a lot from the public good to people who benefit little if inequality aversion is close to zero optimal admission fees are zero these results are robust if earning abilities provide an additional source of heterogeneity and income taxation an additional policy instrument

club good intermediaries abstract the emergence and ubiquitous presence in everyday life of digital goods such as songs movies and e books give renewed salience to the problem of providing public goods with exclusion because digital goods are typically traded via intermediaries like itunes amazon and netflix the question arises as to the optimal pricing mechanism for such club good intermediaries we derive the direct bayesian optimal mechanism for allocating club goods when the mechanism designer is an intermediary that neither produces nor consumes the goods and we develop an indirect mechanism that implements this mechanism we also derive sufficient conditions for the intermediary optimal mechanism to be implementable with revenue sharing contracts which are widely used in e business

pollution claim settlements under private information abstract the classical problem of resolving a nuisance dispute between a pollution generating firm and nearby residents is modelled here as a mechanism design problem we assume that the designer of the mechanism is the firm that it is uncertain about the actual losses suffered by residents and that the initial assignment of property rights is one where each resident is entitled to prevail we derive a profitmaximizing scheme under the individual rationality and incentive compatibility constraints and examine its properties it is shown that the outcomes it yields are sometimes inefficient moreover when many residents are affected by pollution and the degree of uncertainty with respect to the losses they suffer is large these inefficiencies become rampant

public goods with congestion abstract i consider the problem of the efficient provision of a congested limited capacity public good in a setting with asymmetric information i show in particular that when the capacity of the good is limited in a wide class of economies it is possible to construct an incentive compatible mechanism that always produces the good at the efficient level balances the budget and satisfies voluntary participation constraints this result is in contrast with the corresponding impossibility result for pure public goods due to mailath and postlewaite rev econ stud 57 1990 351 359 and rob j econ theory 47 1989 307 333

incomplete contracts and excludable public goods abstract we study whether a firm that produces and sells access to an excludable public good should face a self financing requirement or alternatively receive subsidies that help to cover the cost of public goods provision the main result is that the desirability of a self financing requirement is shaped by an equity efficiency trade off while first best efficiency is out of reach with such a requirement its imposition limits the firm s ability of rent extraction hence consumer surplus may be higher if the firm has no access to public funds

optimal provision of a public good with costly exclusion we examine the problem of providing a non rival and excludable public good to individuals with the same preferences and differing contributing capacities exclusion from the public good is costly in the sense that if two different quantities of the public good are consumed in the community then the sum of the costs of providing the two quantities must be borne by contrast costless exclusion only requires the cost of the largest quantity consumed of the public good to be financed we show that despite its important cost providing public goods in different quantities is often part of any optimal provision of public good when the public authority is imperfectly informed about the agents contributive capacities in the specific situation where individuals have an additively separable logarithmic utility function we provide a complete characterization of the optimal exclusion structure in the two type case we also show that the preference for such a costly exclusion is more likely when the heterogeneity in the population or income is large and when the aversion to utility inequality is important

public good provision with constitutional constraint this article studies the public good provision problem in which the principal faces a constitutional constraint in the sense that in order for a public good provision mechanism to be implemented it must first be approved by agents under a prespecified voting rule i find that as long as the voting rule is not the unanimity rule the principal can propose a mechanism such that first best efficiency of provision of the public good is achieved i also consider various constraints such as prohibition of discriminatory mechanisms and the existence of vote buying and discuss optimal voting rules in these situations

optimal selling strategies when to haggle when to hold firm a seller encountering risk neutral buyers one at a time should if commitments are feasible quote a single take it or leave it price to each this strategy is superior to any other for finite or infinite buyer populations whether there is learning or the distribution of buyer prices is known at the outset with one object for sale or many although haggling may offer advantages in terms of price discrimination these gains are more than offset by the losses it generates by encouraging buyers to refuse purchases at high prices

optimal selling procedures with fixed costs abstract this paper studies the optimal selling procedures for a monopolist when consumers valuations are unknown and there are fixed costs the fixed costs introduce a positive externality among customers each customer benefits from the presence of others who help cover the fixed costs in this context it is optimal for the monopolist to make the probability of each individual being served contingent on the valuations of all the other consumers the monopolist therefore sets a minimum price and then lets each customer contribute as much as he wishes journal of economic literatureclassification numbers d44 d82 l31

inheritance and labor supply using data from the michigan panel study of income dynamics and from federal estate tax returns this paper investigates the labor disincentive caused by inheritance the results are of interest for several reasons whether or not inheritances are a strong labor disincentive figures prominently in the controversy surrounding the relative importance of inheritances and life cycle savings as sources of u s wealth also the size of the disincentive is important in determining the relationship between inheritance and inequality our results indicate that inheritances do not lead to large reductions in the labor supply of men and married women family consumption increases after an inheritance but again the effect is small

pivotal players and the characterization of influence a player s influence relative to a mechanism and opponents strategies is the maximum difference his action can make in the expected value of a collective outcome a player is pivotal if his influence exceeds a threshold we provide tight bounds on the number of pivotal players and on average influence these bounds are uniform over all mechanisms and action profiles and are achieved at mechanisms that take the form of a majority rule we illustrate our analysis with an example of provision of a public good where each individual compares the private cost of his contribution with its influence on the collective outcome journal of economic literature classification numbers d62 d89 h41

motives for private transfers over the life cycle an analytical framework and evidence for peru abstract this paper tests for the motives for private income transfers we consider two motives altruism and exchange the question of private transfer motives is important because such motivation can influence the effects of public income transfers on the distribution of income using a household survey for peru we find that transfer amounts received increase with recipient pre transfer income which contradicts a key prediction of the strong form of the altruism hypothesis but is consistent with exchange we also find that capital market imperfections are likely to be an important cause of private transfers and that social security benefits crowd out the incidence of private transfers

the role of global dynamic managerial capability in the pursuit of international strategy and superior performance we develop the construct of global dynamic managerial capability gdmc and identify its underlying sources 1 international human capital 2 international social capital and 3 international managerial cognitions consistent with dynamic capabilities view and upper echelons theory we suggest that gdmc leads to global asset orchestration which in turn results in superior company performance in a two stage process first gdmc leads companies to adopt global strategies that spread the risk of internationalizations across different entry modes and geographic regions second the re configuration of global assets positively influences subsequent firm performance and thus mediates the relationship between gdmc and performance recognizing the triad of factors that form global dynamic managerial capability is crucial when selecting future managers of multinational corporations hence firms with increasing international exposure both domestically via foreign competition and internationally via foreign market presence may seek to compose their upper echelons with a suitable combination of international human and social capital as well as internationally diverse cognitions in the pursuit of sustained competitive advantage

intra household resource allocation an inferential approach if household income is pooled and then allocated to maximize welfare then income under the control of mothers and fathers should have the same impact on demand with survey data on family health and nutrition in brazil the equality of parental income effects is rejected unearned income in the hands of a mother has a bigger effect on her family s health than income under the control of a father for child survival probabilities the effect is almost twenty times bigger the common preference or neoclassical model of the household is rejected if unearned income is measured with error and income is pooled then the ratio of maternal to paternal income effects should be the same equality of the ratios cannot be rejected there is also evidence for gender preference mothers prefer to devote resources to improving the nutritional status of their daughters fathers to sons

pollution claim settlements under correlated information abstract agents have to decide whether a polluting plant will be operated or not agents disutility cost from pollution is privately known but correlated across agents incentive compatible mechanisms are characterized under the assumption that transfer payments are non negative the implementability constraint is similar to the independence case except that virtual utilities are diminished by a factor due to the correlation of agents types as correlation vanishes the implementability constraint approaches the implementability constraint of the independent types environment it is established that the free riding problem is relaxed as the number of agents increases with many agents ex post efficiency is achievable under ex ante budget balance journal of economic literature classification numbers d82 h41

asymmetric information bargaining problems with many agents a yes or no decision must be made about some issue all agents must agree the coase theorem asserts that the efficient outcome will always result suppose the value positive or negative that an individual attaches to an affirmative decision is privately known to that individual it is proved under very mild conditions that with independent types as the number of agents increases the probability of an affirmative efficient decision goes to zero an example in which it is common knowledge that an affirmative decision is efficient and yet the probability of such a decision goes to zero is given

efficient mechanisms for public goods with use exclusions constrained efficient provision of an excludable public good is studied in a model where preferences are private information the provision level is asymptotically deterministic making it possible to approximate the optimal mechanism with a mechanism that provides a fixed quantity of the good and charges fixed user fees for access in general the fixed fees involve third degree price discrimination but if names are uninformative about preferences the analysis provides a justification for average cost pricing copyright 2004 wiley blackwell

the private provision of excludable public goods an inefficiency result abstract does voluntary contracting suffice for the efficient provision of excludable public goods even in a complete information environment we find that the answer is negative the reason is that some agents may profit from not participating at the provision stage but instead negotiate access ex post

a general characterization of interim efficient mechanisms for independent linear environments we consider the class of bayesian environments with independent types and utility functions which are both quasi linear in a private good and linear in a one dimensional private value type parameter we call these independent linear environments for these environments we fully characterize interim efficient allocation rules which satisfy interim incentive compatibility and interim individual rationality constraints we also prove that they correspond to decision rules based on virtual surplus maximization together with the appropriate incentive taxes we illustrate these techniques with applications to auction design and public good provision

public good provision with many participants for a nonexcludable public good with benefit and cost functions independent of the number of participants this paper studies second best allocations under bayesian interim incentive compatibility and interim individual rationality as the number of participants becomes large second best provision levels converge in distribution to first best levels if the latter are bounded second best provision levels become large in absolute terms but small relative to first best levels if benefit and cost functions are isoelastic in contrast for an excludable public good the ratio of second best to first best levels is bounded away from zero