Flavio M. Menezes

Private provision of discrete public goods with incomplete information

We analyze the private provision of discrete public good games with incomplete information and continuous contributions. To use the terminology of [Admati and Perry, Review of Economic Studies 58 (1991) 259], we consider contribution and subscription games. In the former, contributions are not refunded if the project is not completed, while in the latter they are. We show that the contribution game has only the strong free riding equilibria if cost is high enough. Thus, in this range of cost, the subscription game is superior to the contribution game. We present several interesting equilibria of both types of games and give a new proof of the ex-post inefficiency of the contribution and the subscription games

Multiple-unit English auctions

This paper examines the outcome of an ascending-price multiple-object auction. Two bidders facing continuous, downward sloping demand functions participate in the auction of some divisible objects. The auctioneer starts the process by announcing an initial price and by asking both bidders to submit sealed-bids (desired quantities). The auctioneer increases the price until the total amount bid for is less than the total supply. The US Treasury proposed a similar format to sell Tbills but decided to shelve the idea temporarily. Moreover, this mechanism has been used to sell stocks of government owned companies under the privatization program in Brazil. We compute the outcome of this auction game under full information and conclude that this mechanism has perverse effects in terms of revenue maximization.

The land assembly problem revisited

As in the standard land assembly problem, a developer wants to buy two adjacent blocks of land belonging to two di¤erent owners. The value of the two blocks of land to the developer is greater than the sum of the individual values of the blocks for each owner. Unlike the land assembly literature, however, our focus is on the incentive that each lot owner has to delay the start of negotiations, rather than on the public goods nature of the problem. An incentive for delay exists, for example, when owners perceive that being last to sell will allow them to capture a larger share of the joint surplus from the development. We show that competition at point of sale can cause equilibrium delay, and that cooperation at point of sale will eliminate delay.

Sequential asymmetric auctions with endogenous participation

In this paper we suggest a model of sequential auctions with endogenous participation where each bidder conjectures about the number of participants at each round. Then, after learning his value, each bidder decides whether or not to participate in the auction. In the calculation of his expected value, each bidder uses his conjectures about the number of participants for each possible subgroup. In equilibrium, the conjectured probability is compatible with the probability of staying in the auction. In our model, players face participation costs, bidders may buy as many objects as they wish and they are allowed to drop out at any round. Bidders can drop out at any time, but they cannot come back to the auction. In particular we can determine the number of participants and expected prices in equilibrium. We show that for any bidding strategy, there exists such a probability of staying in the auction. For the case of stochastically independent objects, we show that in equilibrium every bidder who decides to continue submits a bid that is equal to his value at each round. When objects are stochastically identical, we are able to show that expected prices are decreasing.

Existence of equilibrium in a discriminatory price auction

In this paper, we examine a specific discriminatory price auction of Y divisible objects. Players have demand schedules for the objects and are allowed to bid any amount in the interval [0, Y]. This game describes the main features of Treasury bill auctions. We characterize the set of Nash equilibria of this game. In particular, Nash equilibria may not exist unless bidders face demand functions satisfying special restrictions. This result raises questions about using the theory of auctions of single objects to predict the outcome of multi-object auctions. Copyright

Sequential auctions with delay costs : A two-period model

We examine the outcome of a two-round, second-price auction of stochastically equivalent objects where players face delay costs if they decide to stay for the subsequent round. In our model, agents decide whether to stay for the next round after seeing their valuations for the good. We describe an equilibrium involving a screening level such that only those bidders with values bigger than that amount decide to stay for the last period. We also provide an example where expected prices are decreasing.

Assessing the Impact of Blended Learning on Student Performance

This paper assesses quantitatively the impact on student performance of a blended learning experiment within a large undergraduate first-year course in statistics for business and economics students. We employ a difference-in-differences method, which controls for differences in student characteristics and course delivery method, to evaluate the impact of blended learning on student performance. Our results suggest that the impact of blended learning on student performance depends on whether the effect of blended learning is cumulative or not. Blended learning has no impact on student performance if learning is non-cumulative and only affects the performance on the quizzes associated with the material covered by blended learning. However, if learning is cumulative and impacts the performance for the whole course, then our results strongly suggest a strong, negative effect. Taken as a whole, these results provide a possible explanation for why most of the existing studies focusing on short online courses have obtained neutral or even positive results while nearly all the studies focusing on semester-length course tend to observe negative impacts from online learning.

Welfare-Enhancing Mergers Under Product Differentiation

We follow the duopoly framework with differentiated products as in Singh and Vives (1984) and Zanchettin (2006) and examine the welfare effects of a merger between two asymmetric firms. We find that for quantity competition, the merger increases total welfare if the cost asymmetry falls into a specific range. Furthermore, this parameter range widens if the products are closer substitutes. On the other hand, mergers are never welfare enhancing in this setting when firms compete in prices.

An Empirical Investigation of the Mergers Decision Process in Australia

In this paper we examine a database assembled from an Australian public register of 553 merger decisions taken between March 2004 and July 2008. Mergers may be accepted without public assessment, accepted in conjunction with publication of a Public Competition Assessment, or rejected. We estimate an ordered probit model, using these three possible outcomes, with the objective of gaining better insight into the regulator’s decision-making process. Our two major findings are: (i) the existence of entry barriers and the existence of undertakings are highly correlated with the regulator’s decision to closely scrutinise a merger proposal; and (ii) if we compare two decisions, one which does not mention entry barriers (or import competition) with a decision that does mention entry barriers (or import competition), then the latter is significantly more likely to be opposed than the former.

An auction theoretical approach to fiscal wars

Abstract. I examine a situation where a firm chooses to locate a new factory in one of several jurisdictions. The value of the factory may differ among jurisdictions and it depends on the private information held by each jurisdiction. Jurisdictions compete for the location of the new factory. This competition may take the form of expenditures already incurred on infrastructure, commitments to spend on infrastructure, tax incentives or even cash payments. The model combines two elements that are usually considered separately; competition is desirable because we want the factory to be located in the jurisdiction that values it the most, but competition in itself is wasteful. I show that the expected total amount paid to the firm under a large family of arrangements is the same. Moreover, I show that the ex-ante optimal mechanism – that is, the mechanism that guarantees that the firm chooses the jurisdiction with the highest value for the factory, minimizes the total expected payment to the firm, and balances the budget in an ex-ante sense – can be implemented by running a standard auction and subsidizing participation.