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: We study a manufacturer's demand-investment decisions in distribution channels subject to double marginalization. Casting this as a mechanism design problem, we show that demand-enhancing investments strengthen retailers' incentives to exploit market power, forcing manufacturers to concede greater rents. Manufacturers therefore optimally restrict product quality or market coverage. We fully characterize which demand parameters create these perverse incentives: increases benefit manufacturers in segments where they control pricing but harm them in segments with binding incentive constraints. This reveals fundamental limits to demand-side investment in vertical relationships.
working paper (November 2025)
Abstract: We study competition and entry in information markets where buyers combine sellers' signals. Price competition yields efficient trade but need not leave the buyer any surplus. Entry may be anti-competitive, reducing buyer surplus, but is never socially excessive. Competition works through the coalitions of sellers the buyer can credibly exclude. We introduce two notions of complementarity that characterize buyer surplus extraction. Weak competitive complementarity is equivalent to full extraction in some equilibrium. Strong competitive complementarity is equivalent to full extraction in every equilibrium. A global test fully characterizes the weak notion; adding a local test characterizes the strong notion.
working paper (July 2026)
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.