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Full-Text Articles in Social and Behavioral Sciences
The Distribution Of Money Balances And The Nonneutrality Of Money, Aleksander Berentsen, Gabriele Camera, Christopher Waller
The Distribution Of Money Balances And The Nonneutrality Of Money, Aleksander Berentsen, Gabriele Camera, Christopher Waller
Economics Faculty Articles and Research
Recent monetary models with explicit microfoundations are made tractable by assuming that agents have access to centralized markets after one round of decentralized trade. Given quasi-linear preferences, this makes the distribution of money degenerate — which keeps the models simple but precludes discussion of distributional effects of monetary policy. We generalize these models by assuming two rounds of trade before agents can readjust their money holdings to study a range of new distributional effects analytically. We show that unexpected, symmetric lump-sum money injections may increase short-run output and welfare, while asymmetric injections may increase long-run output and welfare.
Comparative Analysis Of Litigation Systems: An Auction‐Theoretic Approach, Michael R. Baye, Dan Kovenock, Casper G. De Vries
Comparative Analysis Of Litigation Systems: An Auction‐Theoretic Approach, Michael R. Baye, Dan Kovenock, Casper G. De Vries
Economics Faculty Articles and Research
A simple auction-theoretic framework is used to examine symmetric litigation environments where the legal ownership of a disputed asset is unknown to the court. The court observes only the quality of the case presented by each party, and awards the asset to the party presenting the best case. Rational litigants influence the quality of their cases by hiring skilful attorneys. This framework permits us to compare the equilibrium legal expenditures that arise under a continuum of legal systems. The British rule, Continental rule, American rule, and some recently proposed legal reforms are special cases of our model.
Auction Markets For Evaluations, Cary Deck, Bart J. Wilson
Auction Markets For Evaluations, Cary Deck, Bart J. Wilson
Economics Faculty Articles and Research
When the value of a product or service is uncertain, outcomes can be inefficient. A market for evaluations can theoretically increase efficiency by voluntarily eliciting an evaluation that would otherwise not be provided. This paper uses a controlled laboratory experiment to test the performance of four market mechanisms to provide product evaluations. The mechanisms considered are derived from the oft studied uniform price sealed bid, discriminatory price sealed bid, English clock auction, and Dutch clock auction. Our results indicate for this nonrivalrous product that (i) each of these institutions improves social welfare and (ii) the performances of the four mechanisms …
Free Riding In Noncooperative Entry Deterrence With Differentiated Products, Dan Kovenock, Suddhasatwa Roy
Free Riding In Noncooperative Entry Deterrence With Differentiated Products, Dan Kovenock, Suddhasatwa Roy
Economics Faculty Articles and Research
We examine free riding and underinvestment in noncooperative entry deterrence in the Gilbert and Vives (1986) model with differentiated products. Our analysis proves that for products that are differentiated enough, when both entry allowing and entry deterring equilibria coexist, the symmetric entry deterring equilibrium may Pareto dominate the entry equilibrium. Hence, "coordination failure" underinvestment in entry prevention can occur. However, as claimed, the overinvestment result of Gilbert and Vives remains robust to moderate amounts of product differentiation. We also show that coordination failure underinvestment arises in a wide variety of entry deterrence models and does not rely on assumptions regarding …