Invited programme

[ Plenary sessions | Invited sessions in Economic Theory| Invited sessions in Econometrics ]

Invited sessions in Economic Theory

August, 25th - Sunday
11.30-13.00

NETWORK INDUSTRIES: EXTERNALITIES, BOTTLENECKS
AND MARKET FAILURE
Mark ARMSTRONG, Nuffield College, Oxford, Uk
Discussant: Xavier VIVES, INSEAD, France

This lecture will discuss common economic features of three industries: (i) telecommunications networks, (ii) media markets funded in part by advertising, and (iii) credit cards. In each of these industries there are two groups of participants (callers/recipients in telecommunications, readers/advertisers in media markets, and consumers/merchants with payment systems), with firms acting as competitive intermediaries between the groups. In each case, network decisions made by one participant affect the terms on which others have "access" to this participant, and leads leads to a danger of market failure.



August, 26th - Monday
11.30-13.00

THE ECONOMICS OF RELATIVE CONSUMPTION
Larry SAMUELSON, University of Wisconsin-Madison, USA
Discussant: Georg NÖLDEKE, University of Bonn, Germany

Preferences exhibit relative consumption effects if agent i's preferences over i's consumption depend upon agent j's consumption. Relative consumption effects may arise out of concerns for status, out of attempts to exploit incomplete environmental information, or out of perceptual errors. Such effects can be built directly into preferences or can arise instrumentally as an optimal response, given ordinary preferences, to market imperfections. This paper will briefly examine the evidence that behavior exhibits relative consumption effects. The bulk of the paper will then examine the possible causes of relative consumption effects, the resulting behavioral implications, and the implications for welfare analysis and economic policy.



August, 27th - Tuesday
11.30-13.00

THEORIES OF DELEGATION: INFORMATION PROCESSING
VERSUS INCENTIVES
Mathias DEWATRIPONT, Université Libre de Bruxelles, Belgium
Discussant: Roland STRAUSZ, Free University Berlin, Germany

This lecture surveys two different but complementary approaches to understanding delegation in organizations: the team-theoretic paradigm that focuses on costly communication and the incentive paradigm. The role of time and budget constraints are investigated in the first approach. As for the second one, it is placed in the general context of the debate on contractual incompleteness, with special emphasis on limited commitment and information acquisition. The complementarities between the two paradigms are stressed, as well as a number of unsolved problems and avenues for further research.



August, 28th - Wednesday
11.30-13.00

CONTEST ARCHITECTURE
Benny MOLDOVANU, University of Mannheim, Germany
Discussant: Dan KOVENOCK, Purdue University, USA

A contest architecture specifies how the prize sum is split among several prizes, and how the contestants (who are here privately informed about their abilities) are split among several sub-contests. We compare the performance of such schemes to that of grand winner-take-all contests from the point of view of designers who maximize either the expected total effort or the expected highest effort. An important explanatory variable is the form of the agents' cost functions. The analysis is based on simple but powerful results about various stochastic dominance relations among order statistics and functions thereof.

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