Abstract: Buyers of information combine the signals they buy. We isolate the first-order effects of combinability in a tractable extension of Bertrand competition that captures any joint signal distribution. Every subgame perfect equilibrium is efficient, so competition determines only how surplus is divided. With $n>2$ sellers, a characterization of that division requires two distinct complementarity conditions on portfolio value: a global balancedness condition characterizes full extraction in \textit{some} equilibrium and a local aggregation condition characterizes full extraction in \textit{every} equilibrium. Entry can be anti-competitive, eliminating buyer surplus while raising welfare, yet is never socially excessive because business stealing is absent.
working paper (July 2026)
30min video presentation in preparation of EEA/ESEM 2026 (august, 2026)
AI-explainer-video (8min)
Abstract: We revisit the tension between the legal doctrine of renegotiation and economic efficiency. We introduce self-revealing mechanisms that combine bidirectional communication (a mechanism privately sends and receives information) with conditional disclosure (communication remains private during renegotiation but becomes verifiable when a mechanism is executed). In the seminal Fudenberg Tirole (1990} moral-hazard framework, we construct a self-revealing mechanism that implements the second-best allocation, thereby restoring the full-commitment outcome otherwise precluded by the renegotiation threat. The mechanism exploits signals privately sent to the agent to construct incentive-compatible punishments that she activates to deter renegotiation offers. It relies only on commitment to its own communication protocol, requires no enforcement beyond standard courts and is implementable with smart-contract techniques. Implementation is unique: the second-best allocation is the unique equilibrium outcome of the renegotiation game, showing that efficiency and renegotiation-proofness are jointly attainable. Our results extend to alternative environments, including infinitely-repeated and supplementary renegotiation.
working paper (August, 2026) (update coming soon)
slides (ESEM, Dublin, 2026)
video presentation (August, 2026) (25minutes)
Abstract: Demand expansion need not benefit a manufacturer. We show that demand-enhancing activities that would raise profit under direct distribution can reduce profit when the manufacturer sells through an independent retailer. The mechanism operates through segment-specific incentive costs: demand expansion affects manufacturer profit not only by increasing sales at the intended retail price, but also by strengthening the retailer's incentive to target other demand segments. We identify these costs by casting a double-marginalization problem as an incentive-design problem. In discrete demand models, demand at the implemented mass-market price raises manufacturer profit, whereas demand at a binding niche-deviation price lowers it by increasing the rents needed to sustain mass-market coverage. The mechanism extends to general demand structures: proportional demand expansion benefits the manufacturer, whereas niche-specific expansion can destroy manufacturer value. The analysis implies that, under retail distribution, manufacturers optimally avoid intermediate niche appeal by either suppressing niche appeal or committing fully to the niche. As a result, retail distribution polarizes product positioning toward clearly mass-market or clearly niche designs, whereas direct distribution is most valuable for intermediate positioning.
working paper (June 2026)
AI-presentation (9min)
Abstract: When multiple parties contribute to a shared reputation, free-riding arises. We study whether internal monitoring by a global player helps. We identify two instruments. Based on his observations, the global player can (i) condition his own effort and (ii) pay discretionary bonuses. These instruments are substitutes; their optimality depends on the global player's effort technology---whether his effort is common or market-specific (separate). Under common effort, conditional effort is generally optimal, dominating relational contracting. Under separate effort, relational contracting dominates when there are two local players or players are patient. In general, the best equilibrium involves conditional contracting, conditional effort, or no use of internal monitoring.
slides (April, 2024)
Abstract: We develop a novel approach for mechanism design with evidence using \citet{Mye82}, allowing a characterization of implementability for general evidence structures. This is so because the revelation principle of \citet{Mye82} applies, yielding standard notions of incentive compatible direct mechanisms. The controllability of evidence however determines their specific structure. We show a general value of controllability. For deterministic implementation, we offer two independent conditions under which this value vanishes, one on evidence (WET) and another on preferences (TIWO). Allowing for fully stochastic mechanisms, we show a general value of randomization and clarify to what extent this value vanishes under the common assumption of evidentiary normality (NOR). Neither control nor randomization have value when NOR holds with WET or TIWO, implying that, without loss, the mechanism design problem can be analyzed assuming controllable evidence and deterministic implementation.
working paper version (March, 2025)
slides (Toronto, 2022.03.22)
video presentation (90min; newer version)
video presentation (20min; older version)
presentations: Cambridge (UK), University of Toronto, Yale University, Paris School of Economics, Michigan University, Penn State
This work is based on and supersedes my working paper "Mechanism design with partially verifiable information" from 2016.