Size-discovery trade mechanisms allow large quantities of an asset to be exchanged at a price that does not respond to price pressure. Primary examples include “workup” in Treasury markets, “matching sessions” in corporate bond and CDS markets, and blocktrading “dark pools” in equity markets. By freezing the execution price and giving up on market-clearing, size-discovery mechanisms overcome co...

This study attempts to measure the inefficiency associated with aggregate investment in a transitional economy. The inefficiency is decomposed into allocative and production inefficiency based on standard production theory. Allocative inefficiency is measured by disequilibrium investment demand. Institutional factors are then taken into consideration as possible explanatory variables of the dis...

Pakistan is home to one of the largest and most complex irrigation infrastructure systems in the world, consisting of 25 million hectares of irrigated agriculture, 56,000 kilometers of main canals, and tubewells in excess of 600,000. Nearly 100 million people depend on 107,000 water courses that are fed by 44 canal systems. Ineffective water management policies in the past have affected water a...

In the year that capital-poor countries open their stock markets to foreign investors, the growth rate of their typical firm’s capital stock exceeds its pre-liberalization mean by 4.1 percentage points. In each of the next three years the average growth rate of the capital stock for the 369 firms in the sample exceeds its pre-liberalization mean by 6.1 percentage points. However, there is no ev...

Allocative inefficiencies in online auction markets can result in the loss of revenues for sellers. It can also cause frustration for buyers who fail to win an item despite placing bids higher than other winners. The main contention of this work is that allocative inefficiencies present arbitrage opportunities, though not strictly in the traditional financial market sense, where risk-free profi...

Incentive regulation is designed to improve productive efficiency, enhance service quality and consumer welfare, and reduce the costs of regulation. The issue that is considered here is whether incentive regulation in the form of a price cap applicable to interstate access service to local loops in the telecommunications industry in the United States has resulted in an increase in the technical...

We study equilibrium prices and trade volume in a market with n identical buyers and a seller who initially commits to some capacity. Sales are sequential and each price is determined by strategic bargaining. A unique subgame perfect equilibrium exists. It is characterized by absence of costly bargaining delays and each trade is settled at a different price. Prices increase with n and fall in t...

In the course of the liberalization of the European energy markets, the German government opted – diverging from all other European countries – for Negotiated Third-Party Access. In this article we analyze if this institutional regime could theoretically lead to efficient market outcomes. Above that, we empirically review whether certain aspects of the actual implementation, the publication of ...

A perpetual youth overlapping generations model is presented in which the presence of financial frictions can create the crowd-in effect of asset bubbles that promotes capital accumulation. The existence of asset bubbles increases the equilibrium interest rate. Although the increased interest rate excludes less productive agents from production activity, these agents benefit from the liquidity ...

We extend the equivalence between Bayesian and dominant strategy implementation established by Gershkov et al. (Econometrica, 2013) to environments with non-linear utilities satisfying the property of increasing differences over distributions and the convex-valued assumption. The new equivalence result produces novel implications to the literature on the principal-agent problem with allocative ...