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Here you will find a list of my working papers. Many of these papers are still works in progress or are under revision. Please feel welcome to contact me if you are interested in a paper that is not available for download directly.
Trading Networks and Equilibrium Intermediation (with C. Matthew Leister)
| abstract | We consider a network of intermediaries facilitating exchange between a buyer and a seller. Intermediary traders face a private trading cost, a network characterizes the set of feasible transactions, and an auction mechanism sets prices. We investigate stable and equilibrium network configurations. Bottlenecks in the trading network arise naturally in a free-entry competitive equilibrium and equilibrium markets organize into an asymmetric structure with many traders near the buyer and fewer traders near the seller. Such asymmetries can render equilibrium markets fragile by amplifying the shocks experienced by key intermediaries in the economy. | download | [ pdf ] Working Paper (20 April 2012) |
Engineered Ambiguity in the Principal-Agent Problem
| abstract | We consider a principal-agent problem with moral hazard. The agent is ambiguity averse and the principal can be ambiguous concerning the contract's evaluative criteria. For example, the contract may promise a reward if output is "sufficiently high" but may not precisely specify what the appropriate threshold is or how it is/will be determined. Although ambiguity makes it more difficult to secure the agent's participation, the principal can exploit it to relax incentive constraints. We show that the optimal contract features ambiguity and allows the principal to implement an action at strictly lower cost than with a fully precise contract. When employing a vague contract the principal has added incentive to conceal the benefits she derives from the principal-agent relationship. |
| download | [ pdf ] Working Paper (Coming Soon) |
On Asymmetric Reserve Prices
| abstract | We investigate equilibrium bidding in standard auctions with asymmetric reserve prices. For example, the auctioneer sets a reserve price of r_1 for one subset of bidders and r_2 for the other subset of bidders. In a first-price auction we identify an equilibrium reserve price externality whereby bidders facing high reserve prices benefit from a reduction of opponents' reserve prices. We document cases where introducing asymmetric reserve prices can increase the auctioneer's expected revenue compared to an optimal, but uniform, reserve price---even if all bidders are ex ante symmetric. Revenue rankings among classic auction formats are derived. An extension of the model considers equilibrium bidding in asymmetric first-price auctions with asymmetric reserve prices. | download | [ pdf ] Working Paper (Coming Soon) |
On the Continuous Equilibria of Affiliated-Value, All-Pay Auctions with Private Budget Constraints (with Fei Li)
| abstract | We consider all-pay auctions in the presence of interdependent, affiliated valuations and private budget constraints. For the sealed-bid, all-pay auction we characterize a symmetric equilibrium in continuous strategies for the case of N bidders and we investigate its properties. Budget constraints encourage more aggressive bidding among participants with large endowments and intermediate valuations. We extend our results to the war of attrition where we show that budget constraints lead to a uniform amplification of equilibrium bids among bidders with sufficient endowments. An example shows that with both interdependent valuations and private budget constraints, a revenue ranking between the two mechanisms is generally not possible. | download | [ pdf ] Working Paper. Currently under review. Please e-mail me if you are interested in the latest version. (23 April 2012) |
First-Price Auctions with Budget Constraints
| abstract | Consider a first-price sealed-bid auction where participants have affiliated valuations and private budget constraints; that is, bidders have private multidimensional types. This article gives sufficient conditions for the existence of a monotone equilibrium in this setting and it offers an equilibrium characterization. Hard budget constraints introduce two competing effects on bidding. The direct effect depresses bids as participants hit their spending limit. The strategic effect encourages more aggressive bidding by participants with large budgets. Together these effects can yield discontinuous equilibrium strategies stratifying competition along the budget dimension. The strategic consequences of private budget constraints can be a serious confound in interpreting bidding behavior in auctions. | download | [ pdf ] Working Paper. Currently under revision. Please e-mail me if you are interested in the latest version. (April 2012) |
First-Price Auctions with Budget Constraints: An Experiment
| download | [ pdf ] Working Paper. Currently under revision, please e-mail me if you are interested in the latest version. (March 2010) |
Auction Choice for Ambiguity-Averse Sellers Facing Strategic Uncertainty: Comment
| publication | [ link ] Games and Economic Behavior 72 (2011): 448-451. |
| download | [ pdf ] Final Working Paper (10 July 2010) |
Voucher Auctions
| download | [ pdf ] Working Paper (23 November 2009) |
| data | [ e-mail ] Data from the experiments. |
| supplements | [ pdf ] Poster (Presented at the Jerusalem Summer School in Economic Theory, June 2009)
[ pdf ] Presentation Slides for the MEA Meeting [Evanston, 2010] and the IAES Meeting [Prague, 2010] |
Hull Clubs and British Maritime Insurance, 1720-1840
| download | [ pdf ] Working Paper (20 March 2007) |
| data | [ xls ] Insurance Rates at Lloyd's of London by Shipping Route, 1810-16 (3 February 2007)
[ xls ] Rates and Accounts of Hull Clubs in N.E. England, 1810-35 (11 February 2007) [ xls ] Ships Insured in the Coal Trade Association, South Shields (1828) (4 July 2007) |
| notes | This paper was written for the economic history requirement in the PhD program at UC Berkeley. I have not worked on this paper since 2007. It is made available as a service for others who may be interested in exploring this topic further. |