We study information aggregation when n bidders choose, based on their private information, between two concurrent common‐value auctions. There are k s identical objects on sale through a uniform‐price auction in market s and there are an additional k r objects on auction in market r , which is identical to market s except for a positive reserve price. The reserve price in market r implies that information is not aggregated in this market. Moreover, if the object‐to‐bidder ratio in market s exceeds a certain cutoff, then information is not aggregated in market s either. Conversely, if the object‐to‐bidder ratio is less than this cutoff, then information is aggregated in market s as the market grows arbitrarily large. Our results demonstrate how frictions in one market can disrupt information aggregation in a linked, frictionless market because of the pattern of market selection by imperfectly informed bidders.

A two-period model of managerial task assignment is developed, where the current employer has the advantage of observing the actual performanc e of the manager, while outside employers can observe only the assign ments. Optimal contracts are rigid, but the market value of managers is below actual productivity and they are promoted less than is effic ient. The author introduces the idea of managers explo iting their information to separate themselves out in the market plac e. As a consequence, the model has the appealing property of small ab ility-based wage differentials within a task, as well as large ones b etween tasks.

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In this paper we analyze an aggregative general equilibriiri model in which the use of money is motivated by a cash-in-advance constraint, applied to purchases of a subset of consumption goods. The system is subject to both real and nxnetary shocks, which are economy-wide and observed by all. We develop methods for verifying the existence of, characterizing, and explicitly calculating equilibria. A main result of the analysis is that current money growth affects the current real allocation only insofar as it affects expectations about future money growth, i.e., only through its value as a signal.

We use a preference-over-menus framework to model a decision maker who is affected by multiple temptations. Our two main axioms on preference—exclusion and inclusion—identify when the agent would want to restrict his choice set and when he would want to expand his choice set. An agent who is tempted would want to restrict his choice set by excluding the normatively worst alternative of that choice set. Simultaneously, he would want to expand his choice set by including a normatively superior alternative. Our representation identifies the agent's normative preference and temptations, and suggests the agent is uncertain which of these temptations will affect him. We provide examples to illustrate how our model improves on those of Gul and Pesendorfer (2001) and Dekel, Lipman, and Rustichini (2009).

Economists have lately been called upon not only to analyze markets, but to design them. Market design involves a responsibility for detail, a need to deal with all of a market's complications, not just its principle features. Designers therefore cannot work only with the simple conceptual models used for theoretical insights into the general working of markets. Instead, market design calls for an engineering approach. Drawing primarily on the design of the entry level labor market for American doctors (the National Resident Matching Program), and of the auctions of radio spectrum conducted by the Federal Communications Commission, this paper makes the case that experimental and computational economics are natural complements to game theory in the work of design. The paper also argues that some of the challenges facing both markets involve dealing with related kinds of complementarities, and that this suggests an agenda for future theoretical research.

This paper develops inference methods for the iterated overidentified Generalized Method of Moments (GMM) estimator. We provide conditions for the existence of the iterated estimator and an asymptotic distribution theory, which allows for mild misspecification. Moment misspecification causes bias in conventional GMM variance estimators, which can lead to severely oversized hypothesis tests. We show how to consistently estimate the correct asymptotic variance matrix. Our simulation results show that our methods are properly sized under both correct specification and mild to moderate misspecification. We illustrate the method with an application to the model of Acemoglu, Johnson, Robinson, and Yared (2008).

If there exist heterogeneous capital goods, a steady state may be "paradoxical" in the sense that increasing the rate of interest above the Golden Rule level may lead to an increase in consumption or utility, rather than to the decrease which always occurs in one-sector models. It is shown that, in many cases, a path of capital accumulation which maximizes the minimum consumption or utility level is unlikely to converge to a paradoxi- cal steady state of this kind.