with Elliott

The paper presents a decentralized model of bargaining in assignment economies. Bargaining is non-cooperative, fully decentralized, and in Markov strategies. The key innovation consist in players having the option to renegotiate existing agreements. The main result establishes that when offers can be renegotiated and players are patient, efficient stationary equilibria always exist. This contrasts with much of the literature which has shown that bargaining may have to be inefficient in any stationary equilibrium when renegotiation is impossible.

The paper considers mechanism design in setting in which agreement can be reached on one of many options. Results characterize the optimal mechanism and establish how revenue and surplus are affected by changes in the distribution of types.

with Schiraldi

The paper establishes why market-entry and competition can increase the profit of an incumbent when the products sold by the entrant are differentiated. The results are developed for Markovian equilibria and do not rely on collusive strategies as in the seminal paper by Gul 1987. Instead, the result shows that the presence of a competitor may actually diminish the undercutting motive of the incumbent when product are suitably differentiated. We the apply these insights to product design model and show why durability can reduce product differentiation and increase efficiency to some extent.

with Schiraldi

with Elliott

with Schiraldi

with Piccione

with Schiraldi

Paper

Paper

Paper