Jesse A. Schwartz

Collusive Bidding : Lessons from the FCC Spectrum Auctions

The Federal Communications Commission (FCC) spectrum auctions use a simultaneous ascending auction design. Bidders bid on numerous communication licenses simultaneously, with bidding remaining open on all licenses until no bidder is willing to bid higher on any license. With full revelation of bidding information, simultaneous open bidding allows bidders to send messages to their rivals, telling them on which licenses to bid and which to avoid. These strategies can help bidders coordinate a division of the licenses, and enforce the proposed division by directed punishments. We examine solutions to mitigate collusive bidding in the spectrum auctions, and then apply these ideas to the design of daily electricity auctions.

Dominant Strategy Implementation with a Convex Product Space of Valuations

A necessary and sufficient condition for dominant strategy implementability when preferences are quasilinear is that, for every individual i and every choice of the types of the other individuals, all k-cycles in i’s allocation graph have nonnegative length for every integer k ≥ 2. Saks and Yu (Proceedings of the 6th ACM conference on electronic commerce (EC’05), pp 286–293, 2005) have shown that when the number of outcomes is finite and i’s valuation type space is convex, nonnegativity of the length of all 2-cycles is sufficient for the nonnegativity of the length of all k-cycles. In this article, it is shown that if each individual’s valuation type space is a full-dimensional convex product space and a mild domain regularity condition is satisfied, then (i) the nonnegativity of all 2-cycles implies that all k-cycles have zero length and (ii) all 2-cycles having zero length is necessary and sufficient for dominant strategy implementability.

A ‘crying wolf’ game of interspecific kleptoparasitic mutualism

We model a potentially mutualistic interaction between a species making antipredator alarm calls and a species which eavesdrops on those calls. Callers may or may not make deceptive alarm calls in order to kleptoparasitize food from eavesdroppers, which in turn may either heed or ignore all alarm calls. The two most likely outcomes in our model are either maximally deceptive callers and maximally trusting eavesdroppers, or persistently cycling strategy frequencies. The latter is favoured by low predator density, low density of any alternative honest alarm-calling species, ability of eavesdroppers to preferentially heed calls when costs of doing so are low and, in some cases, low food availability.

Wage Bargaining under the National Labor Relations Act

Sections 8(a)(3) and 8(a)(5) of the National Labor Relations Act (NLRA) prohibit the management of a firm from unilaterally increasing the wage during contract negotiations without the unions approval. We show how the management can strategically increase the wage during negotiations without violating the NLRA. Increasing the wage during negotiations will upset the unions incentive to strike and decrease the unions bargaining power, thereby shrinking the set of equilibrium contracts in the firms favor. Indeed, as the union becomes more patient, the set of equilibrium wages converges to the best equilibrium outcome to the firm.