Anastasia Leontiou (University of Ioannina) will present her job market paper “Tacit bundling among rivals: Limited availability bargains to loss-averse consumers“ (co-authored withN. Ziros) on March 24th at 10 AM, room QA 406. One-to-one meetings with the speaker can be arranged; please contact the seminar organizers, Dr. Noémie Cabau (email@example.com) and Dr. Arseniy Samsonov (firstname.lastname@example.org).
The current paper addresses a mechanism that encourages the bundle consumption of two substitute goods in a partially differentiated duopoly. Assuming consumer loss aversion à la Kőszegi and Rabin (2006), we develop a bait-and-switch model, where a seller offers a discount in limited availability to attract consumers’ interest and increase their willingness to pay when the discount is not available to avoid the disappointment of leaving the store empty-handed. Due to market competition, such stochastic pricing is effective only when it induces the joint purchase of the products and consumers end up buying both products. As a result, this bait-and-switch strategy creates conditions for collusion between the rival firms as they achieve bundle scheme sales at high component prices without any explicit agreement. Hence, our results shed light on bait-and-switch practices that might require additional, well-designed policies.
Héctor Hermida-Rivera (University of East Anglia) will present his job market paper “Stable Voting Rules“ on March 20th at 10 AM, room QA 406. One-to-one meetings with the speaker can be arranged; please contact the seminar organizers, Dr. Noémie Cabau (email@example.com) and Dr. Arseniy Samsonov (firstname.lastname@example.org).
This paper introduces a flexible notion of stability for voting rules that can be used with any equilibrium concept. Theorem 1 shows that if players’ utility function satisfies four natural axioms, a voting rule is stable in Nash equilibria if and only if it has a unique minimal winning coalition. Theorem 2 shows that under the same four axioms, the set of stable voting rules in undominated Nash equilibria contains the set of voting rules with a unique minimal winning coalition and is contained in the set of voting rules with non-empty intersection of minimal winning coalitions. Finally, Theorems 3 to 6 rely on these results to partially characterise the set of self-stable constitutions, where a constitution is a pair of voting rules: an ordinary one for routine issues, and an extraordinary one for amendments.
Luca Sandrini (Research Center of QSMS, BME) will present: “Protecting secrets with organizational innovations“ on March 14th at 2:30 PM, room QA 406.
I propose a theory of the determinants of organizational innovation which considers it as a device to lower workers’ autonomy in the production process and their ability to collect information about it. In particular, I show that firms may have incentives to increase their control over the workforce to limit spillovers of potentially valuable information if they cannot limit workers’ mobility. I design a theoretical model where firms decide how to organize the workforce to reach a target level of productivity. I assume workers’ effort increases productivity at the organizational level, but it may reduce workers learning if excessive. When firms face the threat of information spillovers regarding their secrets, they are keener to intensify control over the workforce to limit it. From a policy perspective, I show banning laws restricting workers’ mobility might be an incomplete policy, as companies would find alternative mechanisms other than legal protections to defend against appropriation.
Maxim Senkov (CERGE-EI Center for Economic Research and Graduate Education – Economics Institute) will present his job market paper “Setting Interim Deadlines to Persuade“ on March 10th at 10 AM, room QA 406. One-to-one meetings with the speaker can be arranged; please contact the seminar organizers, Dr. Noémie Cabau (email@example.com) and Dr. Arseniy Samsonov (firstname.lastname@example.org).
A principal funds a multistage project and retains the right to cut the funding if it stagnates at some point. An agent wants to convince the principal to fund the project as long as possible and can design the flow of information about the progress of the project in order to persuade the principal. If the project is sufficiently promising ex ante, then the agent commits to providing only the good news that the project is accomplished. If the project is not promising enough ex ante, the agent persuades the principal to start the funding by committing to provide not only good news but also the bad news that a project milestone has not been reached by an interim deadline. I demonstrate that the outlined structure of optimal information disclosure holds irrespective of the agent’s profit share, benefit from the flow of funding, and the common discount rate.
Andrei Kalk (University of Vienna) will present his paper “Environmental policy under political pressure “ on March 7th at 10 AM, room QA 406. One-to-one meetings with the speaker can be arranged; please contact the seminar organizers, Dr. Noémie Cabau (email@example.com) and Dr. Arseniy Samsonov(firstname.lastname@example.org).
Climate change poses major challenges for governments around the world because the transition from a traditional economy to a carbon-neutral one must take place rapidly if tipping points are not to be exceeded. A particularly important aspect of this transition is that it necessarily creates economic winners and losers. Individual companies or entire industries that are dependent on the use of fossil fuels lose part of their business basis, while other industries benefit immensely from the transition to CO2 neutrality. This situation creates a favorable breeding ground for lobbying and other forms of political influence. The present paper is an attempt to contribute to the understanding of this problem.