Research
PUBLISHED PAPERS:
Committee Preferences and Information (with Claudine Desrieux, accepted for publication, Journal of Industry, Trade and Competition)
Optimal Procurement and Investment in New Technologies under Uncertainty (with Gijsbert Zwart, Journal of Economic Dynamics and Control, 2023, 147, 104605.)
Who drops out of entrepreneurship? An experiment during the Covid-19 lockdown (with Claudine Desrieux and Romain Espinosa, Managerial & Decision Economics, 2023, 44(2), 698-715)
Level-k Models Rationalize Overspending in Contests (with Marco Serena, Games, 13(3), 45)
Bidding Competition on the Norwegian Market for Road Maintenance (with Armando J.G. Pires and Frode Skjeret, Journal of Transport Economics and Policy, 2022, 56(4), 464-487)
Investments and the Role of Costly Procedures (with Takakazu Honryo, Journal of Economics and Business, 2022, 122, 106068)
Offentlig upphandling ‒ i gränslandet mellan ekonomi och juridik (Sofia Lundberg, Mats A Bergman and Lars Henriksson, SNS Konjunkturrådsrapport, 2022)
Access-price structure and entrants' build-or-buy incentives in mobile markets (Øystein Foros and Hans Jarle Kind, Journal of Regulatory Economics, 2022, 61, 67-87)
The Role of Budget Constraints in Sequential Elimination Tournaments (with Olga Chiappinelli, Scandinavian Journal of Economics, 2021, 123(4), 1059-1087)
Plattformsøkonomi og finans (2019, Magma, 8, 80-86)
Dynamic Procurement under Uncertainty: Optimal Design and implications for Incomplete Contracts (with David Martimort, 2016, American Economic Review, 106(11), 3238-3274)
Long-Term Contracts, Irreversibility and Uncertainty (2016, Journal of Public Economic Theory, 18, 764-785)
Procurement and Predation: Dynamic Sourcing from Financially Constrained Suppliers (2014, Journal of Public Economics, 120, 157-168)
WORKING PAPERS AND WORK IN PROGRESS:
Partnerships and Mergers when Size Matters (with Øystein Foros and Hans Jarle Kind)
In several industries, downstream competitors form upstream partnerships. An important reason for doing so arises when upstream marginal costs are decreasing in sales. Such economies of scale imply that downstream prices might be strategic substitutes. This has profound effects on the strategic behavior of both members of a partnership (insiders) and non-members (outsiders). In particular, the insiders may prefer to remain downstream rivals rather than to merge. The reason is that if they were to merge, they would de facto commit to set higher prices. If prices are strategic substitutes, the outsiders would then, to the detriment of the insiders, respond by reducing their prices. If this effect is sufficiently strong, a merger will be unprofitable.
Procurement auctions for long-term projects with financial constraints (with David Martimort, submitted)
We consider a procurement auction for the provision of a long-term basic service to which an add-on, whose costs are ex ante uncertain, must later be appended. Potential service providers are symmetric, have private information on their cost of providing the basic service and the rm winning the auction is also in charge of implementing the add-on. To finance cost-reducing activities related to the add-on, this rm may need extra funding by outside financiers. Effort in reducing costs being non-verifiable creates a moral hazard problem vis-a-vis outside financiers. This agency problem makes the firm's payoff function for the second period concave in returns. This concavity has two important effects. First, it makes it more attractive to backload payments to facilitate information revelation on the cost of the basic service; an Income Effect. Second, uncertainty on the cost of the add-on introduces a background risk which requires a risk premium; a Risk Effect. In this context, we characterize the optimal intertemporal structure of payments to the winning firm. We also describe equilibrium bidding behavior and reserve prices in the first-price auction.
Management and Organizational Behavior under Asymmetric Information (with Takakazu Honryo)
This paper analyzes and compares different decision-makings styles in a principal-agent environment with private information. We provide a necessary and sufficient condition for a decision-making style to be optimal. We also consider the interaction between different decision-making styles and show that it is preferable for the principal to use one single decision-making style for a given decision.
Delegation in Teams (with Takakazu Honryo)
This paper considers delegation of a decision to a team of informed agents. It shows under what conditions delegation is optimal as well as to whom to delegate the formal decision-making right. The latter depends on a trade-off between 1) improved communication and better information in the team when the player with the decision-making rights is considered closer to the other agents' preferences and 2) the cost from distorted decisions due to biased and misaligned preferences.
Underrepresentation, Quotas and Stigma: A dynamic argument for reform (with Justin Valasek)
The tension between increased representation and stigma is central to the debate on whether to use quotas to address underrepresentation in high-profile professions. We address this trade-off using a dynamic model of career selection where juniors value both the identity and prestige of their mentors (seniors). A preference for homophily causes persistence of underrepresentation, even if discrimination is eliminated, suggesting intervention is needed. However, if an abrupt quota causes a high level of stigma, then underrepresented juniors of high talent will select out of the profession, causing a persistence of stigma. Encouragingly, we show that gradual reform—while introducing some stigma in the short term—enables a transition to a stigma-free steady state with equal representation in the long term. We discuss the implications of our analysis for commonly-used measures to increase representation
Business-to-Business Negotiations with Outside Options (with Øystein Foros and Hans Jarle Kind)
In many markets we observe that suppliers offer a range of products, where some products are strong brand products for retailers, such that in practice no equivalent suppliers exist. For other products o
ered by the same suppliers there may exist alternatives (outside options) for the retailers. We consider a bilateral bargaining framework where one supplier and one retailer negotiate over linear wholesale prices for two goods offered by the supplier. The retailer has a threat to execute an outside option for one of the goods. In contrast to the case with a single-good supplier, the distribution of bargaining power affects wholesale prices also when the outside option is binding. The higher the retailer's bargaining weight in the outside option, the lower are wholesale prices for both goods. The wholesale prices are identical for both goods, even though an outside option only exists for one of the goods. Gains for the retailer from threatening to use its outside option decreases in its own bargaining weight.
The value of screening tools in cartel cases (with Armando J.G. Pires, Ronny Gjendemsjø, Ignacio Herrera Anchustegui and Frode Skjeret)
In this paper, we analyse the value of screening tests for competition authorities in cartel cases. We argue that screen tests can function as a useful tool to raise red flags about possible cartels operating in different markets, whether consumer markets or auction markets. In addition, if screening tools become credible and successful, they can also have a deterrence effect on new or existing cartels. We analyse the legal foundations of screen tests in the light of the EU competition law and build a case to use screen tests in order to trigger dawn raids. We then look to the main challenge associated with screens tests, false positives, and defend the use of different screens simultaneously in order to reduce the problem of false positives combined with an analysis of market and macro-economic conditions.