Partnerships, signaling, and contests

Viac o knihe

This dissertation comprises three self-contained essays analyzing strategic behavior among asymmetrically informed individuals in auction-like mechanisms. Each essay focuses on different settings and emphasizes distinct points. The first essay proposes a simple dissolution mechanism for partnerships with a single asset, where partners bid in an auction for the asset, and the highest bidder wins. The auction revenue is distributed among partners based on their asymmetric shares. The findings indicate that the loss in expected gains from trade when using this auction instead of an incentive-efficient mechanism is minimal. The second essay develops a model for oligopolistic firms with private information on their cost structures. A competitive advantage is allocated to some firms through a multi-object auction before market competition begins. Depending on the auction format, bid announcement policy, and market competition type, an equilibrium may exist where bids accurately reflect bidders' costs. In the final essay, a variant of the Tullock rent-seeking contest is examined. It establishes equilibrium strategies under symmetric information and proves their uniqueness. With privately informed contestants about their effort costs, a pure-strategy equilibrium exists, and a condition for uniqueness is provided. The analysis reveals that when players are uncertain about others' costs, aggregate effort is lower than under private