Local Identification in Empirical Games of Incomplete Information

This paper studies identification for a broad class of empirical games in a general functional setting. Global identification results are known for some specific models, for instance in some standard auction models. We use functional formulations to obtain general criteria for local identification. These criteria can be applied to both parametric and nonparametric models, as well as models with asymmetry among players and affiliated private information. A benchmark model is developed where the structural parameters of interest are the distribution of private information and an additional dissociated parameter, such as a parameter of risk aversion. Criteria are derived for some standard auction models, games with exogenous variables, games with randomized strategies, such as mixed strategies, and games with strategic functions that cannot be derived analytically

Comparison of Alternative Payment Mechanisms for French Treasury Auctions

 À travers le monde, les enchères du Trésor sont habituellement mises en oeuvre sous l'un des deux formats, « uniforme » ou « discriminatoire ». Nous proposons des mécanismes de paiements alternatifs, dont les formats uniforme et discriminatoire sont des cas particuliers et nous comparons les propriétés de ces formats alternatifs dans le cas particulier des enchères du Trésor Français. Nos résultats indiquent qu'un nouveau mécanisme de paiement, que nous appelons le « k-ieme prix moyen », domine tous les autres formats quant au revenu qu'il pourrait engendrer pour le Trésor Français. Nous trouvons cependant que l'enchère dite « Espagnole » produit la source de revenu la plus stable d'une enchère à l'autre.  Treasury auctions around the world have been typically conducted under either the uniform-price or discriminatory format. We propose alternative payment mechanisms including the uniform-price and discriminatory formats as special cases. We compare the properties of these alternative formats in the specific context of French Treasury auctions. Our results indicate that a new payment mechanism, named the “kth-average-price” auction, dominates all other formats in terms of the revenues it would raise for the French Treasury. The so-called “Spanish auction” however, is found to generate the most stable stream of revenues from one auction to the next

Local Identification in Empirical Games of Incomplete Information

This paper studies identification for a broad class of empirical games in a general functional setting. Global identification results are known for some specific models, for instance in some standard auction models. We use functional formulations to obtain general criteria for local identification. These criteria can be applied to both parametric and nonparametric models, as well as models with asymmetry among players and affiliated private information. A benchmark model is developed where the structural parameters of interest are the distribution of private information and an additional dissociated parameter, such as a parameter of risk aversion. Criteria are derived for some standard auction models, games with exogenous variables, games with randomized strategies, such as mixed strategies, and games with strategic functions that cannot be derived analytically.

LOCAL IDENTIFICATION IN EMPIRICAL GAMES OF INCOMPLETE INFORMATION

This paper studies identification for a broad class of empirical games in a general functional setting. Global identification results are known for some specific models, e.g., in some standard auction models. We use functional formulations to obtain general criteria for local identification. These criteria can be applied to both parametric and nonparametric models, and also to models with asymmetry among players and affiliated private information. A benchmark model is developed where the structural parameters of interest are the distribution of private information and an additional dissociated parameter, such as a parameter of risk aversion. Criteria are derived for some standard auction models, games with exogenous variables, games with randomized strategies, such as mixed strategies, and games with strategic functions that cannot be derived analytically.

Cross-border M&A motives and home country institutions: Role of regulatory quality and dynamics in the Asia-Pacific region

The purpose of this paper is to analyze the relationship between home country institutions and cross-border merger and acquisition (M&A) motives of MNEs from the Asia-Pacific region, with a focus on the role of regulatory quality and dynamics. We empirically examine how M&A motives are affected by elements related to risk of the institutional environment of the acquiring firm's home country regulatory quality over time. The study is grounded in the general theory of springboard MNEs, and the institutional views of cross-border operations, namely the institutional escapism and institutional fostering perspectives. Using data on over 700 cross-border M&As of European firms by Asia-Pacific MNEs in 2007-2017, we analyze the rationales for these deals and their relationship to the institutional characteristics of the buyers' home countries including regulatory quality and voice and accountability. We found that the quality of home country regulatory environment is significantly related to domestic firms' motivation for international M&As. However, the significance and sign of the effects differ for different types of motives and over time. Our findings contribute to the literature on general versus emerging MNE-specific internationalization theories (particularly the theory of springboard MNEs) by expounding on the types and dynamics of cross-border M&A motives

Cross-Border M&A Motives and Home Country Institutions: Role of Regulatory Quality and Dynamics in the Asia-Pacific Region

The purpose of this paper is to analyze the relationship between home country institutions and cross-border merger and acquisition (M&A) motives of MNEs from the Asia-Pacific region, with a focus on the role of regulatory quality and dynamics. We empirically examine how M&A motives are affected by elements related to risk of the institutional environment of the acquiring firm’s home country regulatory quality over time. The study is grounded in the general theory of springboard MNEs, and the institutional views of cross-border operations, namely the institutional escapism and institutional fostering perspectives. Using data on over 700 cross-border M&As of European firms by Asia-Pacific MNEs in 2007–2017, we analyze the rationales for these deals and their relationship to the institutional characteristics of the buyers’ home countries including regulatory quality and voice and accountability. We found that the quality of home country regulatory environment is significantly related to domestic firms’ motivation for international M&As. However, the significance and sign of the effects differ for different types of motives and over time. Our findings contribute to the literature on general versus emerging MNE-specific internationalization theories (particularly the theory of springboard MNEs) by expounding on the types and dynamics of cross-border M&A motives