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RESEARCH |
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Working Papers: Quantity Competition in Networked Markets [Job Market Paper forthcoming] This analysis investigates how economies in which trades can occur only amongst individuals that know each other operate. Two general equilibrium models of oligopolistic Cournot competition are discussed. In the first individuals choose outflows to each neighbor and the demand at the each node is used to clear markets. While in the second inflows are chosen and the supply is used to clear markets. In such markets changes in flows, affect both inflow and outflow prices. Moreover one of these distortions does not disappear as the changes in flows vanish. Conditions for the existence of a pure strategy equilibrium in the flow competition models are provided. In such economies suppliers price discriminate across buyers connected to them, but compete in each local market. Flows in the economy are characterized. Equilibrium resale with positive markups occurs. But neighbors with different marginal rates of substitution do not necessarily trade. Such networked economies are subject to Braess's paradox. Thus adding links may reduce social welfare. Moreover in such environments increasing the set of trading partners of an individual may cause him to suffer a loss. Sufficient conditions on the connectedness of the network are provided for the networked economy to converge to a competitive outcome as it grows large. In this simple setup it is proven that resale must vanish for an economy to become competitive as it grows large.
Joint Commitment: Implementation without Public Randomization This paper investigates how the ability to jointly rule out actions affects behavior in a game. If players can voluntarily sign contracts that commit them to jointly rule out some of their actions, mutually beneficial bargains can often be found. The set of allocations implemented if players have a single opportunity to sign contracts that deterministically rule out some actions is characterized. Because players are not allowed to sign random contracts, it may appear that such subset of contracts does not in general implement all efficient allocations. The analysis however shows that if players have sufficiently many opportunities in which to sign such deterministic contracts, any individually rational allocation is approximately implementable. Therefore the implementation of any efficient and individually rational allocation does not require any randomness in the mechanism used if players have several opportunities in which to reach an agreement. Extended Version: Independent and Joint Commitment
Strategic Voting in Quorum Rules with Disclosure: Theory & Evidence The paper analyzes strategic voting in quorum rules with disclosure. In such rules voters opposing the reform would like to condition their vote upon preferences in the committee. Incomplete information limits their ability to act upon such information, when votes are either simultaneous or unobservable. However, if the timing of the vote is endogenous and participation is observable, the outcome of the consultation could be substantially biased against the reform, even though no information on votes is ever disclosed. Such phenomenon can be mitigated by holding multiple consultations at once, because information on participation no longer suffices to infer whether a quorum has passed. If participation is observable, quorum rules are susceptible to vote buying, since abstention is not neutral and contractible. Evidence from Italian referenda supporting the predictions of the model is discussed. [Significantly Altered Draft by November 10]
Other Projects (Drafts upon Request):
Current research to be added soon time permitting. |
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