13 research outputs found
Implementation of the Walrasian Correspondence by Market Games
In this paper we present a set of axioms guaranteeing that, in exchange economies with or without indivisible goods, the set of Nash, Strong and active Walrasian Equilibria all coincide in the framework of market games.Market Games, Implementation
Innovation Contests with Entry Auction
We consider procurement of an innovation from heterogeneous sellers. Innovations are random but depend on unobservable effort and private information. We compare two procurement mechanisms where potential sellers first bid in an auction for admission to an innovation contest. After the contest, an innovation is procured employing either a fixed prize or a first-price auction. We characterize Bayesian Nash equilibria such that both mechanisms are payoff-equivalent and induce the same efforts and innovations. In these equilibria, signaling in the entry auction does not occur since contestants play a simple strategy that does not depend on rivals' private information
Computing welfare losses from data under imperfect competition with heterogeneous goods
We study the percentage of welfare losses (PWL) yielded by imperfect competition under
product differentiation. When demand is linear, if prices, outputs, costs and the number of firms
can be observed, PWL is arbitrary in both Cournot and Bertrand equilibria. If in addition, the
elasticity of demand (resp. cross elasticity of demand) is known, we can calculate PWL in
Cournot (resp. Bertrand) equilibrium. When demand is isoelastic and there are many firms, PWL
can be computed from prices, outputs, costs and the number of .rms. In all these cases we find
that price-marginal cost margins and demand elasticities may influence PWL in a
counterintuitive way. We also provide conditions under which PWL increases or decreases with
concentration