A. Daughety

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Should the manufacturer of a product be held legally responsible if a consumer, while using the product, harms someone else? This is a question that has long vexed courts. Manufacturers might be held liable for accidental harms caused by the consumer, such as when a lawnmower flings a stone that hits a neighbor in the eye or when a driver of a car hits a(More)
In this paper, we study the incentives for market concentration of (online and traditional) auction houses. Would sellers and buyers be better off if two separate auction houses merged? We suppose that each auction house has a separate clientele of sellers and buyers. Sellers value their (identical) units at 0, while buyers have independent private values.(More)
Using Taylor Rules As Efficiency Benchmarks In this article, benchmark Taylor rules are obtained as the solution to a dynamic programming problem in which interest rates are chosen to minimize the discounted sum of observed inflation and output variations. The properties of these benchmark rules are used to derive efficiency conditions that are amenable to(More)
In this Article, we suggest that litigation can be analyzed as though it is a competitive research and development project. Developing this analogy, we present a two-stage real option model of the litigation process that involves sequential information revelation and bargaining over the surplus generated by early settlement. Litigants are risk-neutral and(More)
I study the design and implementation of trade agreements under asym-metric information with the help of an impartial third party. The Dispute Settlement Body (DSB) of the World Trade Organization is modeled as an impartial entity that provides 'recommendations' for the resolution of disputes based on its imperfect observation of the state of the world. A(More)
In this paper we present a model of oligopoly and financial constraints. We study allocations which are bankruptcy-free (BF) in the sense that no firm can drive another firm to bankruptcy without becoming bankrupt. We show how such allocations can be sustained as an equilibrium of a dynamic game. When there are two firms, all equilibria yield BF(More)
In this paper we present a model of oligopoly and …nancial constraints. We study allocations which are bankruptcy-free (BF) in the sense that no …rm can drive another …rm to bankruptcy without becoming bankrupt. We show how such allocations can be sustained as an equilibrium of a dynamic game. When there are two …rms, all equilibria yield BF allocations.(More)
The decision to request a preliminary injunction—a court order that bans a party from certain behavior until its lawfulness is ascertained in a final court ruling at trial—is an important litigation instrument in many areas of the law including antitrust, copyright, patents, trademarks, employment and labor relations as well as contracts. The process of(More)