Publications
Publications
"On three welfare properties of monopoly in bilateral exchange" (2025), with F.Busetto, G. Codognato and S. Ghosal. Journal of Mathematical Economics
Abstract: We establish three welfare properties of the model of monopoly introduced by Busetto et al. (2023), where one commodity is held only by the monopolist, represented as an atom, and the other is held only by small traders, represented by an atomless part. First, we prove that a monopoly allocation is Pareto optimal if and only if it is an allocation which corresponds to an efficiency equilibrium. Second, we reformulate a paradox, due to Shitovitz (1997), to show that for any monopoly allocation there is another core allocation, distinct from both a monopoly allocation or a Walras allocation, which is, utility-wise, advantageous for the monopolist and nonadvantageous for the small traders. Finally, we prove a theorem which shows that monopoly is advantageous for the monopolist and nonadvantageous for each trader in the atomless part with respect to all Walras allocations which are not monopoly allocations.
"On the foundation of monopoly in bilateral exchange" (2023) , with F.Busetto, G. Codognato and S. Ghosal, International Journal of Game Theory
Abstract: We address the problem of monopoly in general equilibrium in a mixed version of a monopolistic two-commodity exchange economy where the monopolist, represented as an atom, is endowed with one commodity and “small traders,” represented by an atomless part, are endowed only with the other. First we provide an economic theoretical foundation of the monopoly solution in this bilateral framework through a formalization of an explicit trading process inspired by Pareto (Cours d’économie politique. F. Rouge Editeur, Lausanne, 1896) for an exchange economy with a finite number of commodities, and we give the conditions under which our monopoly solution has the geometric characterization proposed by Schydlowsky and Siamwalla (Q J Econ 80:147–153, 1966). Then, we provide a game theoretical foundation of our monopoly solution through a two-stage reformulation of our model. This allows us to prove that the set of the allocations corresponding to a monopoly equilibrium and the set of the allocations corresponding to a subgame perfect equilibrium of the two-stage game coincide. Finally, we compare our model of monopoly with a bilateral exchange version of a pioneering model proposed by Forchheimer (Jahrbuch für Gesetzgebung, Verwaltung und Volkswirschafts im Deutschen Reich 32:1–12, 1908), known as a model of “partial monopoly” since there a monopolist shares a market with a“competitive fringe.”
Abstract: We study the existence of a monopoly equilibrium in the bilateral mixed exchange framework introduced by Busetto et al.(2023). Non existence examples in which small traders have CES utility functions are provided and a link between the existence of an equilibrium and the degree of substitutability of the goods is explored. Therefore, the existence result is proved by introducing a sufficient assumption on the utilities of the small traders, stressing that we need them to be locally equivalent to linear utilities.
"Noncooperative Oligopoly in Markets with a Continuum of Traders and a Strongly Connected Set of Commodities: A Limit Theorem", with F.Busetto, G. Codognato, S. Ghosal andL. Julien. R&R at Games and Economics Behaviour
Absract: We consider a mixed version of the Shapley window model, where large traders are represented as atoms and small traders are represented by an atomless part. Motivated by the result that a countable infinity of atoms is neither a necessary nor a sufficient condition for a Cournot-Nash allocation to be a Walras allocation, we analyze the asymptotic relationship between the set of the Cournot-Nash allocations of the strategic market game and the Walras allocations of the exchange economy with which it is associated. Our main theorem shows that any sequence of Cournot-Nash allocations of the strategic market games associated with the partial replications of the exchange economy has a limit point for each trader and that the assignment determined by these limit points is a Walrasian allocation of the original economy. Instead of relying on restrictive assumptions on the characteristics of atoms, as in Busetto et al. (2017), our limit theorem relies on the characteristics of agents in the atomless part and their endogenously price-taking behavior.
"Monopoly in Bilateral Exchange: Some Historico-Analytical Remarks", with F.Busetto, G. Codognato, F. Donzelli and S. Ghosal. Submitted
In this paper, we characterize, under the assumption that the aggregate demand of the atomless part for the commodity held by the monopolist is invertible, the monopoly quantity setting solution proposed by Kats (1974a) as the monopolist’s most preferred commodity bundle in the complement of the atomless part’s offer curve which is feasible with respect to the aggregate initial endowments. Then, we show that the monopoly solution in bilateral exchange introduced by Busetto et al. (2023) coincides with the monopoly quantity setting solution proposed by Kats (1974a). Finally, we reformulate, the Shitovitz paradox, first exhibited by Busetto et al. (2023), in terms of the Kats monopoly solution. In particular we show that, for any allocation corresponding to a Kats’ monopoly solution, there is an allocation in the core, which is, utility-wise, advantageous for the monopolist and nonadvantageous for the small traders, and which is not in the feasible complement of the atomless part's offer curve.
"The Time Sensitivity of Aspirational Interventions: Evidence from a Role-Modeling RCT " with P.Bhan, J.Wen and M.Schroeder, Submitted. AEA RCT Registry
Abstract: This paper investigates the short-run effects of an aspiration-raising intervention delivered via a randomized controlled trial among postgraduate students at a UK university during the Covid-19 pandemic. A video-based role-modelling intervention led to an immediate increase in aspirations and a delayed increase in self-reported effort. However, both effects dissipated within a few weeks. Employing a simple behavioral model that incorporates time-varying psychological cost of deviating from aspirations, we argue that aspirations may exert greater influence on effort when the goal is closer in time. Our findings suggest that timing and reinforcement are important considerations for the sustained effectiveness of aspiration-building strategies.
"Disadvantage, Pessimism and Grit" with P.Dalton and S. Ghosal.