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All Outputs (15)

Multidimensional Bargaining and Posted Prices (2021)
Journal Article
Hagen, M., & Hernando-Veciana, A. (2021). Multidimensional Bargaining and Posted Prices. Journal of Economic Theory, 196, Article 105317. https://doi.org/10.1016/j.jet.2021.105317

A seller and a buyer bargain over the quantities and prices of multiple goods. Both agents have private information about their preferences. Utility is quasilinear in money. We show that a deterministic mechanism satisfies (i) dominant-strategy incen... Read More about Multidimensional Bargaining and Posted Prices.

Cheap Talk and Strategic Rounding in Libor Submissions (2019)
Journal Article
Hernando-Veciana, A., & Tröge, M. (2020). Cheap Talk and Strategic Rounding in Libor Submissions. The Review of Financial Studies, 33(6), 2585-2621. https://doi.org/10.1093/rfs/hhz101

Interbanking rates were, until recently, based on judgmental estimates of borrowing costs. We interpret this as a cheap-talk game that allowed banks to communicate nonverifiable information about their opportunity cost to potential counterparties. Un... Read More about Cheap Talk and Strategic Rounding in Libor Submissions.

Inefficient Rushes in Auctions (2018)
Journal Article
Hernando-Veciana, A., & Michelucci, F. (2018). Inefficient Rushes in Auctions. Theoretical Economics, 13(1), 273-306. https://doi.org/10.3982/te2513

We analyze a setting common in privatizations, public tenders, and takeovers in which the ex post efficient allocation, i.e., the first best, is not implementable. Our first main result is that the open ascending auction is not second best because it... Read More about Inefficient Rushes in Auctions.

The dynamics of bidding markets with financial constraints (2014)
Journal Article
Beker, P. F., & Hernando-Veciana, Á. (2015). The dynamics of bidding markets with financial constraints. Journal of Economic Theory, 155, 234-261. https://doi.org/10.1016/j.jet.2014.11.013

We develop a model of bidding markets with financial constraints à la Che and Gale [15] in which two firms choose their budgets optimally and we extend it to a dynamic setting over an infinite horizon. We provide three main results for the case in wh... Read More about The dynamics of bidding markets with financial constraints.

On the optimality of not allocating (2014)
Journal Article
Hernando-Veciana, Á., & Michelucci, F. (2014). On the optimality of not allocating. Economics Letters, 125(2), 233-235. https://doi.org/10.1016/j.econlet.2014.09.016

We show that the commitment to not allocate may be exploited by a seller/social planner to increase the expected social surplus that can be achieved in the sale of an indivisible unit.

When are signals complements or substitutes? (2012)
Journal Article
Börgers, T., Hernando-Veciana, A., & Krähmer, D. (2013). When are signals complements or substitutes?. Journal of Economic Theory, 148(1), 165-195. https://doi.org/10.1016/j.jet.2012.12.012

The paper introduces a notion of complementarity (substitutability) of two signals which requires that in all decision problems each signal becomes more (less) valuable when the other signal becomes available. We provide a general characterization wh... Read More about When are signals complements or substitutes?.

Second best efficiency and the English auction (2011)
Journal Article
Hernando-Veciana, Á., & Michelucci, F. (2011). Second best efficiency and the English auction. Games and Economic Behavior, 73(2), 496-506. https://doi.org/10.1016/j.geb.2011.04.003

We study the second best in a single unit sale to two bidders. This is the allocation that maximizes the expected social surplus subject to the biddersʼ incentive compatible constraints when the first best is not implementable. We prove that Maskinʼs... Read More about Second best efficiency and the English auction.

The insider's curse (2010)
Journal Article
Hernando-Veciana, Á., & Tröge, M. (2011). The insider's curse. Games and Economic Behavior, 71(2), 339-350. https://doi.org/10.1016/j.geb.2010.05.007

The paper shows that in an open-ascending bid auction with multi-dimensional uncertainty about private and common value components, private information about the common value has negative value for a bidder if there are sufficiently many bidders. We... Read More about The insider's curse.

Information acquisition in auctions: Sealed bids vs. open bids (2008)
Journal Article
Hernando-Veciana, Á. (2009). Information acquisition in auctions: Sealed bids vs. open bids. Games and Economic Behavior, 65(2), 372-405. https://doi.org/10.1016/j.geb.2007.10.015

This paper studies the incentives of a bidder to acquire information in an auction when her information acquisition decision is observed by the other bidders before bidding. Our results show that the sealed bid (second price) auction may induce more... Read More about Information acquisition in auctions: Sealed bids vs. open bids.

On the Sub-optimality of Entry Fees in Auctions With Entry (2006)
Journal Article
Hernando-Veciana, Á. (2006). On the Sub-optimality of Entry Fees in Auctions With Entry. Review of Economic Design, 10(1), 53-61. https://doi.org/10.1007/s10058-006-0001-4

We study a variation of Myerson’s (1981) model in which we allow for uncertainty about the number of bidders. In our set-up, an appropriate reserve price in a standard auction maximizes the auctioneer’s expected revenue. However, entry fees can be op... Read More about On the Sub-optimality of Entry Fees in Auctions With Entry.

Competition among auctioneers in large markets (2004)
Journal Article
Hernando-Veciana, Á. (2005). Competition among auctioneers in large markets. Journal of Economic Theory, 121(1), 107-127. https://doi.org/10.1016/j.jet.2004.03.001

We analyse a multistage game of competition among auctioneers. First, the auctioneers commit to some reserve prices; second, the bidders enter one auction, if any; and finally, the auctions take place. We show that for any finite set of feasible rese... Read More about Competition among auctioneers in large markets.