The failure of the revenue equivalence principle: multiple objects, information acquisition and favoritism

A celebrated result of auction theory is the revenue equivalence principle which states that with independent private values and a single unit for sale all selling (or procurement) mechanisms that give the object to the bidder with the highest valuation generate the same revenue. The present thesis explores in each chapter a different deviation from the revenue equivalence princi- ple and compares selling (or procurement) mechanisms that would be equivalent otherwise. In chapter two the equivalence between the first-price auction and the descending auction fails if more than one unit is for sale. In chapter three and four the equivalence between all four of the standard auction formats fails in the case that bidders are not fully informed about their private valuation and may acquire additional information in the course of the auction. The fifth chapter theoretically analyzes the differences between optimal auctions and negotiations that can only arise in the presence of favoritism

Contract (re-)negotiation with private and common values

We analyze the contracting problem of a principal who faces an agent with private information and cannot commit to not renegotiating a chosen contract. We model this by allowing the principal to propose new contracts any number of times after observing the contract choice of the agent. We propose a characterization of renegotiation-proof states of this (re-)negotiation and show that those states are supported by a perfect Bayesian equilibrium of an infinite horizon game. The characterization of renegotiation-proof states provides a tool, which is both powerful and simple to use, for finding such states in specific environments. We proceed by applying the results to adverse selection environments with private and common values. We show that with private values and common values of the ’Spence’ type only, fully efficient and separating states can be renegotiation-proof. With common values of the "Rothschild-Stiglitz" type inefficient and (partial) pooling states may be renegotiation-proof

Incomplete contracts in dynamic procurement

We analyze the problem of a buyer who purchases a long-term project from one of several suppliers. A changing state of the world influences the costs of the suppliers. Complete contracts conditioning on all future realizations of the state are infeasible. We show that contractual incompleteness comes without a cost. The buyer achieves the same surplus with complete and incomplete contracts. The key insight is that the allocation prescribed by optimal complete contracts is sequentially optimal with incomplete contracts if the buyer does not receive too much information ex-interim. We show that the English auction restricts the information optimally

Contract design with limited commitment

We consider the problem of a principal who wishes to contract with a privately informed agent and is not able to commit to not renegotiating any mechanism. That is, we allow the principal, after observing the outcome of a mechanism to renegotiate the resulting contract without cost by proposing a new mechanism any number of times. We provide a general characterization of renegotiation-proof states of such a renegotiation. The proposed solution concept provides an effective and easy-to-use tool to analyze contracting problems with limited commitment. We apply the solution concept to a setting with a continuous type space, private values and non-linear contracts. We find that the optimal contracts for the principal are pooling and satisfy a “no-distortionat-the-bottom” property

Imitation perfection : a simple rule to prevent discrimination in procurement

Procurement regulation aimed at curbing discrimination requires equal treatment of sellers. However, Deb and Pai (2017) show that such regulation imposes virtually no restrictions on the ability to discriminate. We propose a simple rule - imitation perfection - that restricts discrimination significantly. It ensures that in every equilibrium bidders with the same value distribution and the same valuation earn the same expected surplus. If all bidders are homogeneous, revenue and social surplus optimal auctions which are consistent with imitation perfection exist. For heterogeneous bidders however, it is incompatible with revenue and social surplus optimization. Thus, a trade-off between non-discrimination and optimality exists

Ein flexibles Vergütungskonzept für Mediziner hilft, Herdenimmunität gegen COVID-19 zu erreichen

Herdenimmunität, oder zumindest eine hohe Durchimpfung, ist ein Ziel der Impfungen gegen COVID-19. Dieses soll möglichst schnell erreicht werden, um weitere Ansteckungswellen zu verhindern und auch die Ausbreitung stärker ansteckender Varianten zu bremsen. Bisher war die Impfstoffmenge ein limitierender Faktor, der aber zeitnah verschwinden wird, so dass das Impfangebot durch Mediziner und die Impfbereitschaft in der Bevölkerung relevant für die Zielerreichung wird. Die Impfbereitschaft in der Bevölkerung kann jedoch niedriger sein als es für Herdenimmunität notwendig ist. Neben einer generellen Ablehnung einer Impfung ist auch relevant, dass der individuelle Nutzen einer Impfung in der Anzahl der insgesamt Geimpften abnimmt. Insbesondere Menschen mit hohen Transaktionskosten beispielsweise durch unflexible Arbeitszeiten, Betreuungsbedarf für Kinder oder fehlende Transportmittel werden zunächst ungeimpft bleiben. Bisherige Diskussionen konzentrieren sich auf die Nachfrage nach Impfungen, d.h. die Schaffung von Anreizen für potentiell Impfwillige. Es sollte aber auch die Angebotsseite, d.h. die impfenden Mediziner nicht vernachlässigt werden. Aufklärung und Information durch impfende Mediziner ist ein entscheidender Faktor in der Erhöhung der Impfbereitschaft. Allerdings gilt: Je mehr Menschen geimpft sind, desto schwieriger wird es potentiell Impfwillige zu erreichen, aufzuklären und zu impfen. Dadurch steigen die Kosten im Verlauf der Impfkampagne. Impfende Mediziner benötigen eine flexible Kostenerstattung, die an den Aufwand angepasst ist. Ein bedarfsorientiertes Kostenerstattungsschema für Mediziner kann hier Abhilfe schaffen

Stellungnahme zu Grundsätzen und Szenarien für die Bereitstellung der Mobilfunkfrequenzen : Stellungnahme des ZEW Mannheim im Rahmen der öffentlichen Konsultation der Bundesnetzagentur

Die Bundesnetzagentur (BNetzA) veröffentlichte am 21. Juni 2021 ein Szenarienpapier, das sich mit Grundsätzen der zukünftigen Bereitstellung von Mobilfunkfrequenzen mit einem besonderen Fokus auf die Verbesserung der Breitbandversorgung befasst. Das ZEW – Leibniz-Zentrum für Europäische Wirtschaftsforschung GmbH Mannheim nimmt als unabhängiges Wirtschaftsforschungsinstitut dazu Stellung. Der Schwerpunkt der Stellungnahme ist die Ausgestaltung künftiger Vergabeverfahren und die Integration von Zielen der Breitbandversorgung in diese Verfahren

Endogenous worst-case beliefs in first-price auctions

Bidding in first-price auctions crucially depends on the beliefs of the bidders about their competitors' willingness to pay. We analyze bidding behavior in a first-price auction in which the knowledge of the bidders about the distribution of their competitors' valuations is restricted to the support and the mean. To model this situation, we assume that under such uncertainty a bidder will expect to face the distribution of valuations that minimizes her expected utility, given her bid is an optimal reaction to the bids of her competitors induced by this distribution. This introduces a novel way to endogenize beliefs in games of incomplete information. We find that for a bidder with a given valuation her worst-case belief just puts sufficient probability weight on lower valuations of her competitors to induce a high bid. At the same time the worst-case belief puts as much as possible probability weight on the same valuation in order to minimize the bidder's winning probability. This implies that even though the worst-case beliefs are type dependent in a non-monotonic way, an efficient equilibrium of the first-price auction exists

Sequential procurement with limited commitment

We analyze the problem of a buyer who chooses a supplier for a long-term relationship via an auction. The buyer lacks commitment to not renegotiate the terms of the contract in the long run. Thus, suppliers are cautious about the information revealed during the auction. We show theoretically and experimentally that first-price auctions perform poorly in terms of efficiency and buyer surplus. Suppliers may pool on a high bid to conceal information. Second-price auctions retain their efficient equilibrium and generate substantial surplus for the buyer. We demonstrate that optimal mechanisms require concealing the winning bid with a strictly positive probability