7 research outputs found
Competition and networks of collaboration
I develop a model of collaboration between tournament participants in which
agents collaborate in pairs, and an endogenous structure of collaboration is represented by a weighted network. The agents are forward-looking and capable of
coordination; they value collaboration with others and higher tournament rankings. I use von Neumann–Morgenstern stable sets as a solution. I find stable networks in which agents collaborate only within exclusive groups. Both an absence
of intergroup collaboration and excessive intragroup collaboration lead to inefficiency. I provide a necessary and sufficient condition for the stability of efficient
outcomes in winner-takes-all tournaments. I show that the use of transfers does
not repair efficiency
Circles of Trust: Rival Information in Social Networks
We analyze the diffusion of rival information in a social network. In our model, rational agents can share information sequentially, unconstrained by an exogenous protocol or timing. We show how to compute the set of eventually informed agents for any network, and show that it is essentially unique under altruistic preferences. The relationship between network structure and information diffusion is complex because the former shapes both the charity and confidentiality of potential senders and receivers
Nonlinear pricing of storable goods
This paper develops a model of nonlinear pricing of storable goods. We show that storability imposes novel constraints on a monopolist’s ability to extract surplus. We then show that the attempt to relax these constraints can generate cyclical patterns in pricing and sales, even when consumers are homogeneous. Thus, the model provides a novel explanation for sales that does not rely on discrimination motives. Enriching the model to allow for buyer heterogeneity in storage technology, delivers the prediction that larger containers are more likely to be on sale. This prediction is consistent with observed patterns in scanner data
Consumer Privacy and Serial Monopoly
We examine the implications of consumer privacy when preferences today depend upon past consumption choices, and consumers shop from different sellers in each period. Although consumers are ex ante identical, their initial consumption choices cannot be deterministic. Thus, ex post heterogeneity in preferences arises endogenously. Consumer privacy improves social welfare, consumer surplus and the profits of the second-period seller, while reducing the profits of the first period seller, relative to the situation where consumption choices are observed by the later seller