Deceptive Advertising with Rational Buyers

We study a Bertrand game where two sellers supplying products of different and unverifiable qualities can outwit potential clients through their (costly) deceptive advertising. We characterize a class of pooling equilibria where sellers post the same price regardless of their quality and low quality ones deceive buyers. Although in these equilibria low quality goods are purchased with positive probability, the buyer (expected) utility can be higher than in a fully separating equilibrium. It is also argued that low quality sellers invest more in deceptive advertising the better is their reputation vis-à-vis potential clients — i.e., firms that are better trusted by customers, have greater incentives to invest in deceptive advertising when they produce a low quality product. Finally, we characterize the optimal monitoring effort exerted by a regulatory agency who seeks to identify and punish deceptive practices. When the objective of this agency is to maximize consumer surplus, its monitoring effort is larger than under social welfare maximization

Is There a Walrasian Equilibrium in Exchange Markets with Endowment Effect

We provide an axiomatic framework for exchange markets with a willingness- to-pay/willingness-to-accept discrepancy. First, we obtain a two parameter family of market invariants under price-scaling representing the excess demand. One of the parameters can be identified as endowment. The other is a new feature, called demand-supply gap, that leads to classical general equilibrium if zero. Second, we provide representations of price and demand as unbounded operators on an infinite dimensional Hilbert space. We prove that neither can this space be finite dimensional nor can these operators be bounded. Third, if the demand-supply gap is not zero we obtain that price and demand are not simultaneously sharply measurable and consequently a Walrasian equilibrium does not exist

What Mechanism Design Theorists Had to Say About Laboratory Experimentation in the Mid-1980s

Thanks to the recent studies of the history and philosophy of experimental economics, it is well known that around the early 1980s, experimental economists made a case for the legitimacy of their laboratory work by emphasizing that it was a nice and indispensable complement to mechanism design theorists' mathematical study of institutions. The present paper examines what mechanism design theorists thought of laboratory experimentation, or whether they were willing to form a coalition with experimental economists circa the mid-1980s. By exploring several dimensions of the relationship between mechanism design theory and experimental economics, the present paper shows that a close rapport had been established by the early 1980s between the representative members of the two camps, and also that mechanism design theorists were among the strongest supporters of laboratory experimentation in the economics profession in the mid-1980s

Protective effect of geranylgeranylacetone against radiation-induced delayed effects on human keratinocytes

International audienceSkin exposure to ionizing radiation affects the normal wound healing process. We investigated the beneficial effects of a pharmacological treatment with geranylgeranylacetone (GGA) on keratinocytes using in vitro scratch wound injury assay in nonirradiated and irradiated conditions. Irradiation affected the wound closure of keratinocytes 24 h after scratch injury, whereas re-epithelialization was markedly accelerated after GGA treatment when compared to nontreated keratinocytes. We demonstrated that GGA treatment increased migration of human epidermal keratinocytes and this migratory property was not related to RhoA signaling. Interestingly, Western blot analysis revealed that GGA treatment down-regulated caspase 3 active form expression and up-regulated the activated phenotype by inducing both keratin 6 (K6) expression and interleukin-1β (IL-1β) release without modification of the differentiate phenotype. Finally, the proteomic profiling was performed on keratinocytes, showing that global protein changes occurred after irradiation of keratinocytes treated or untreated with GGA