Research

Asymmetric Auctions with Discretely Distributed Valuations - (with Nicola Doni and Domenico Menicucci) - The BE Journal of Theoretical Economics, 25(1): 99-118. (2025).

We examine a two-bidder auction setting in which the distributions for the bidders’ valuations are asymmetric over a support consisting of three elements. For the first price auction, for each parameter values we derive the unique Bayes Nash Equilibrium in closed form. We rely on this result to compare the revenue in the first price auction with the revenue in the second price auction. The latter is often revenue superior to the former, and we determine precisely, given a distribution for the value of a bidder, when a distribution for the value of the other bidder exists such that the first price auction is superior to the second price auction. 

Collusion with Not-So-Secret Rings  - Journal of Quantitative Economics, 22(2): 563 - 570. (2024).

When collusion is analyzed for Independent private value auctions, it is implicitly assumed that ring presence is commonly known to colluding and non-colluding bidders. We drop this assumption and analyze a simple model of a first price Independent Private Value auction with uniformly distributed values where a single bidder knows privately of the existence of collusion by others. We show that this knowledge leads him to bid shading (weakly) in the first price auction compared to what he would have bid otherwise. This in turn yields the result that the second price auction dominates the first price auction in terms of seller revenue. This contrasts results from the literature showing that under our framework, when bidding is done while the presence of colluding bidders is common knowledge, the first price auction dominates the second price auction. 

Earlier versions appeared under the title - Suspecting Collusion.

Secret vs Public Rings in Common Value Auctions - Forthcoming - International Journal of Economic Theory (2025).

For a second-price common value auction with an “almost all-inclusive ring”, we analyze whether the auctioneer should reveal the ring’s presence, and if so, whether this revelation should be public or private to the nonring bidder. We show for a family of value functions that public revelation induces the nonring bidder to bid higher than in a non-cooperative scenario. This implies that the auctioneer may improve his position this way. On the other hand, it highlights a new tactic that an auctioneer may use to manipulate bidder behavior by creating the false impression of collusion to induce higher bids.

Congestion and the Market Structure of Fleets - (with Federico Boffa and Alberto Iozzi)

Fleets are becoming increasingly prevalent in urban transport. Unlike traditional vehicles, fleet operators may be able to internalize, at least partly, the congestion cost they impose on other fleet vehicles, thereby reducing the level of congestion. We analyze the optimal market structure in the market for fleets by comparing welfare under a monopolistic and a competitive fleet. Our model exhibits a unit mass of heterogeneous travelers choosing between private vehicles, vehicles belonging to a fleet, and public transport. We assume that private and fleet vehicles create congestion, while public transport does not. We emphasize a stark trade-off: a monopolistic fleet may be better at internalizing the congestion cost, but, as standard, may inefficiently reduce the amount of fleet vehicles dispatched. We find that, when the cost of a private car is high (such as in the case of dense urban contexts), and travelers choose between fleet vehicles and public transport only, a monopolistic fleet may be welfare superior to a competitive fleet, due to its superior ability to internalize congestion costs. In situations where the cost of using a private car is low or public transport options are absent, travelers face a choice between private cars and fleet vehicles only. Under these conditions, a competitive fleet structure is welfare-superior to a monopolistic one, as cost-reflective pricing, fostered by competition, exerts a greater influence on welfare than the internalization of congestion externalities.