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Department of Economics

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https://hdl.handle.net/10919/24208

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Browsing Department of Economics by Author "Bahel, Eric A."

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    Strategic Resource Dependence and Adoption of a Substitute under Learning-by-Doing
    Bahel, Eric A.; Chakravorty, Ujjayant (Virginia Tech, 2013-06-28)
    There is ample evidence that the production of alternative sources of energy is subject to learning-by-doing. The present paper examines the implications of learning-by-doing in the bilateral resource monopoly studied by Gerlagh and Liski (2011). We derive the socially optimal use of both oil and the substitute, as well as the Markov-perfect equilibrium. Our results are qualitatively different from those of Gerlagh and Liski. We show that it may be socially efficient to discard part of the cheap oil stock. Interestingly, we find that, in the Markov-perfect equilibrium, the buyer curbs his consumption to conserve the oil stock owned by the seller.
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    Strategyproof Choice of Acts: Beyond Dictatorship
    Bahel, Eric A.; Sprumont, Yves (Virginia Tech, 2017-05-20)
    We model uncertain social prospects as acts mapping states of nature to (public) outcomes. A social choice function (or SCF) assigns an act to every profile of subjective expected utility preferences over acts. A SCF is strategyproof if no agent ever has an incentive to misrepresent her beliefs about the states of nature or her valuation of the outcomes; it is ex-post efficient if the act selected at any given preference profile picks a Pareto-efficient outcome in every state of nature. We offer a complete characterization of all strategyproof and ex-post efficient SCFs. The chosen act must pick the most preferred outcome of some (possibly different) agent in every state of nature. The set of states in which an agent's top outcome is selected may vary with the reported belief profile; it is the union of all the states assigned to her by a collection of constant, bilaterally dictatorial, or bilaterally consensual assignment rules.