Issue by issue legislative bargaining (joint with Monica A. Giovanniello and Clara Ponsatí).

In this paper, we study the disjunctive facing the members of a committee with risk-averse agents when deciding between conducting negotiations issue-by-issue or by bundling issues. While in unanimity regimes bundling issues is preferred when agents are sufficiently patient, we show that under simple majority, the inherent risk of being excluded from a winning coalition makes issue-by-issue the preferred regime as far as the inefficiencies generated by the impossibility of inter-issue compensation are not too high. 

Buying from the fringe (too) (joint with Lluís Bru and József Sákovics)

We analyze how to divide the requirements of a (public) firm into lots, when potential suppliers suffer from heterogeneous diseconomies of scale. The optimal design leads to all firms, included the disadvantaged competitors, the fringe, being active, despite the concomitant cost of increasing supplier profit. Setting large lots that only large firms can produce competitively is necessary; but also setting small lots that the fringe firms can competitively bid for, reduces procurement cost. If, in addition, some medium-sized lots are set aside for the fringe –as allowed by the US regulations, but not by the EU ones –procurement cost is further reduced

Two-level lobbying and policy gridlock (joint with Jenny C. de Freitas and Antoni Rubí Barceló). Submitted

In this study, we model a two-stage contest to examine the strategic behavior of two opposing interest groups who may influence a public policy at two different stages, say the formulation of an alternative to the status quo and the approval stage. We characterize the equilibria and study the interest groups's incentives to invest in one stage or the other. We examine the circumstances under which the status quo is never replaced.

Social Institutions and Collective Performance  (joint with Antoni Rubí Barceló). 

This paper develops a contest model between groups to assess how different institutional configurations affect a society's performance in inter-group conflicts. Specically, we examine how tax systems and the degree of franchise extension shape

the probability of winning. We show that societies equipped with tax systems and appropriately extended franchises perform weakly better are more likely to prevail than those relying on voluntary bilateral wealth transfers. Additionally, the optimal franchise extension that maximizes the winning probability depends jointly on the nature of the conflict and the group's underlying characteristics.

Strategic Investment Mix under Lobbying and Activist Pressure: Ex-Ante Abatement and Ex-Post Compensation   (joint with Jenny C. De Freitas and Antoni Rubí Barceló). 

This paper studies how the availability of ex-post compensation affects firms’ incentives to undertake preventive environmental investment under a strict liability rule. We develop a model of strategic interaction between a monopolist and an environmental group in which lobbying and activist campaigns jointly determine the likelihood of regulation. To comply with regulation, the firm can invest in ex-ante abatement before production and in ex-post compensation, such as corporate social responsibility initiatives or adaptation measures, after production. Although the two instruments are dynamically complementary —because early abatement lowers the marginal cost of subsequent compensation—the availability of ex-post compensation crowds out preventive investment by enabling the firm to sustain higher production. Accounting for the strategic effects of firms’ investments on the probability of regulation, expected environmental damage may therefore exceed that under a regime without ex-post compensation. By contrast, activist campaigns strengthen incentives for ex-ante abatement, implying that environmental groups optimally combine lobbying and activism to improve environmental outcomes.