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I analyze a model of a private value divisible good auction with different payment rules, standard rationing rule pro-rata on-the-margin and both with and without a restriction on the number of bids (steps) bidders can submit. I provide characterization of equilibrium bidding strategies in a model with restricted strategy sets and I show that these(More)
A bidding process can be organized so that offers are submitted simultaneously or sequentially. In the latter case, potential buyers can condition their behavior on previous entrants’ decisions. The relative performance of these mechanisms is investigated when entry is costly and selective, meaning that potential buyers with higher values are more likely to(More)
This paper examines the interaction between health insurance and the implicit insurance that people have because they can file (or threaten to file) for bankruptcy. With a simple model that captures key institutional features, I demonstrate that the financial risk from medical shocks is capped by the assets that could be seized in bankruptcy. For households(More)
This paper studies how a firm’s ability to price discriminate over time affects production, product quality, and product allocation among consumers. The theoretical model has forwardlooking heterogeneous consumers who face a monopoly firm. The firm can affect the quality and quantity of the goods sold each period. I show that in the model the welfare(More)
We introduce a simple and robust approach to address two key questions in empirical auction analysis: discriminating between models of entry and quantifying the revenue gains from improving auction design. The approach builds on Bulow and Klemperer (1996), connecting their theoretical results to empirical analysis. It applies in a broad range of information(More)
Pay-as-bid is the most popular auction format for selling treasury securities. We prove the uniqueness of pure-strategy Bayesian-Nash equilibria in pay-as-bid auctions where symmetrically-informed bidders face uncertain supply, and we establish a tight sufficient condition for the existence of this equilibrium. Equilibrium bids have a convenient separable(More)
This paper studies European banks’ demand for short-term funds during the summer 2007 subprime market crisis. We use bidding data from the European Central Bank’s auctions for one-week loans, their main channel of monetary policy implementation. Through a model of bidding, we show that banks’ bidding behavior reflects their cost of obtaining short-term(More)
In many financial markets, dealers have the advantage of observing the orders of their customers. To quantify the economic benefit that dealers derive from this advantage, we study detailed data from Canadian treasury auctions, where dealers observe customer bids while preparing their own bids. In this setting, dealers can use information on customer bids(More)