{"title":"Personalized pricing, network effects, and commitment","authors":"Yan Xiong , Liyan Yang","doi":"10.1016/j.jet.2025.106036","DOIUrl":"10.1016/j.jet.2025.106036","url":null,"abstract":"<div><div>Big data and data technology have facilitated the widespread adoption of personalized pricing practices. While price personalization enables firms to extract greater rent from consumers, it often reduces price transparency, which can negatively impact firm profits in situations involving consumer coordination. In such contexts, a firm's commitment to pricing strategies can become essential for restoring profitability. We explore several commitment devices available to firms and discuss their implications. These devices include delegating pricing decisions to a manager who prioritizes consumer surplus, leveraging existing networks as signals for later consumers or to build reputation, and implementing uniform pricing or price caps in response to regulatory restrictions.</div></div>","PeriodicalId":48393,"journal":{"name":"Journal of Economic Theory","volume":"227 ","pages":"Article 106036"},"PeriodicalIF":1.4,"publicationDate":"2025-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144190243","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Intertemporal allocation with unknown discounting","authors":"Justin Burkett , Kyle Woodward","doi":"10.1016/j.jet.2025.106030","DOIUrl":"10.1016/j.jet.2025.106030","url":null,"abstract":"<div><div>We consider the problem faced by a durable-good monopolist who can allocate a single good at any time, but is uncertain of a buyer's values and temporal preferences for receiving the good. We derive conditions under which it is optimal for the monopolist to ignore the uncertainty about the buyer's discount factor and allocate immediately via a single first-period price. Under one condition, the seller optimally offers a single first-period price if she would weakly raise this price upon learning that the buyer cannot be too impatient (<span><span>Corollary 2</span></span>). A related condition states that the single first-period price is optimal if buyer types with higher discount factors have stochastically higher values (<span><span>Corollary 3</span></span>). These conditions also apply when sellers face ambiguity regarding the buyer's discount factor. Our results provide a novel justification for ignoring heterogeneous discount factors when the seller is incompletely informed about buyer's temporal preferences.</div></div>","PeriodicalId":48393,"journal":{"name":"Journal of Economic Theory","volume":"227 ","pages":"Article 106030"},"PeriodicalIF":1.4,"publicationDate":"2025-05-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144170720","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Goutham Gopalakrishna , Seung Joo Lee , Theofanis Papamichalis
{"title":"Beliefs and the net worth trap","authors":"Goutham Gopalakrishna , Seung Joo Lee , Theofanis Papamichalis","doi":"10.1016/j.jet.2025.106033","DOIUrl":"10.1016/j.jet.2025.106033","url":null,"abstract":"<div><div>We develop a tractable framework to explore how beliefs about long-term economic growth shape macroeconomic and financial stability. By modeling belief distortions among productive capital users, we provide an analytical characterization of a novel phenomenon termed the “net worth trap”, wherein overly optimistic or pessimistic beliefs among productive agents prevent them from rebuilding wealth, causing permanent inefficiencies. A procyclical swing in beliefs reduces or exacerbates the instability, indicating that the type of belief when the economy is vulnerable has important consequences on financial stability and macroeconomic dynamics.</div></div>","PeriodicalId":48393,"journal":{"name":"Journal of Economic Theory","volume":"227 ","pages":"Article 106033"},"PeriodicalIF":1.4,"publicationDate":"2025-05-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144139458","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Two-player rationalizable implementation","authors":"Ritesh Jain , Ville Korpela , Michele Lombardi","doi":"10.1016/j.jet.2025.106031","DOIUrl":"10.1016/j.jet.2025.106031","url":null,"abstract":"<div><div>The paper characterizes the class of two-player social choice functions implementable in rationalizable strategies under complete information.</div></div>","PeriodicalId":48393,"journal":{"name":"Journal of Economic Theory","volume":"227 ","pages":"Article 106031"},"PeriodicalIF":1.4,"publicationDate":"2025-05-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144105085","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Intermediation as rent extraction","authors":"Maryam Farboodi , Gregor Jarosch , Guido Menzio , Ursula Wiriadinata","doi":"10.1016/j.jet.2025.106029","DOIUrl":"10.1016/j.jet.2025.106029","url":null,"abstract":"<div><div>This paper shows that intermediation in asset markets may emerge exclusively because of rent extraction motives. Among dealers with heterogeneous bargaining skills, those with superior skills become intermediaries and constitute the core of the trading network, while those with inferior skills constitute the periphery. Intermediation is privately profitable because agents with superior bargaining skills can take positions and unwind them in the future at a better price than others could. Intermediation arises endogenously despite being socially worthless and the resources invested in bargaining skills are wasted. Using a dataset on the Indonesian interbank market, we document that prices vary with the centrality of buyers and sellers in a way that is uniquely consistent with our theory.</div></div>","PeriodicalId":48393,"journal":{"name":"Journal of Economic Theory","volume":"227 ","pages":"Article 106029"},"PeriodicalIF":1.4,"publicationDate":"2025-05-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144105084","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Overborrowing, underborrowing, and macroprudential policy","authors":"Fernando Arce , Julien Bengui , Javier Bianchi","doi":"10.1016/j.jet.2025.106019","DOIUrl":"10.1016/j.jet.2025.106019","url":null,"abstract":"<div><div>In this paper, we revisit the scope for macroprudential policy in production economies with pecuniary externalities and collateral constraints. We study competitive equilibria and constrained-efficient equilibria and examine the extent to which the gap between the two depends on the production structure and the policy instruments available to the planner. We argue that macroprudential policy is desirable regardless of whether the competitive equilibrium features more or less borrowing than the constrained-efficient equilibrium. In our quantitative analysis, macroprudential taxes on borrowing turn out to be larger when the government has access to ex-post stabilization policies.</div></div>","PeriodicalId":48393,"journal":{"name":"Journal of Economic Theory","volume":"227 ","pages":"Article 106019"},"PeriodicalIF":1.4,"publicationDate":"2025-05-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143934874","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"A tractable group all-pay auction","authors":"Stefano Barbieri , Iryna Topolyan","doi":"10.1016/j.jet.2025.106016","DOIUrl":"10.1016/j.jet.2025.106016","url":null,"abstract":"<div><div>We consider group all-pay auctions with a wide range of effort complementarity in which teammates coordinate efforts via a group-specific correlation device. Under mild regularity conditions, there is a unique equilibrium effort distribution, independent of the distribution of the correlation device. We characterize this unique distribution of efforts and analyze the effects of value dispersion, degree of complementarity, and group size. We show that this effort distribution can be achieved without correlation devices as the equilibrium outcome of a cheap talk game in which players engage in costless <em>unmediated</em> preplay communication.</div></div>","PeriodicalId":48393,"journal":{"name":"Journal of Economic Theory","volume":"226 ","pages":"Article 106016"},"PeriodicalIF":1.4,"publicationDate":"2025-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143895423","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Perverse ethical concerns: Misinformation and coordination","authors":"Dongkyu Chang , Allen Vong","doi":"10.1016/j.jet.2025.106011","DOIUrl":"10.1016/j.jet.2025.106011","url":null,"abstract":"<div><div>We study a coordination game played by a large number of agents, who acquire private signals about a hidden state on a platform before choosing individual actions. The platform privately and imperfectly filters misinformation, improving the precision of these signals. We show that a platform with an ethical concern to proactively improve agents' welfare could perversely reduce their welfare by aggravating their disagreements about the state and in turn undermining coordination. We also show that misinformation regulations aimed at improving agents' welfare are effective if and only if their implementation is sufficiently aggressive.</div></div>","PeriodicalId":48393,"journal":{"name":"Journal of Economic Theory","volume":"226 ","pages":"Article 106011"},"PeriodicalIF":1.4,"publicationDate":"2025-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143916617","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The economics of career concerns in teamwork","authors":"Huseyin Yildirim","doi":"10.1016/j.jet.2025.106017","DOIUrl":"10.1016/j.jet.2025.106017","url":null,"abstract":"<div><div>This paper examines incentives in teams of career-concerned members, where effort and talent can be substitutes (<span><span>Holmström, 1999</span></span>) or complements (<span><span>Dewatripont et al., 1999</span></span>). It is shown that the degree of effort-talent complementarity determines which team member exerts more effort and thus gains or loses more reputation following team performance. The paper argues that organizations can boost incentives by promoting concern for collective reputation. Strategies to achieve this include facilitating team cooperation, limiting external competition for individual talent, and positively sorting talent into teams. The paper further explores optimal performance ratings to motivate teams when the organization has easy access to individual outputs. These ratings generally deviate from team output and may even induce competition, depending on the signal-to-noise ratio and talent correlations.</div></div>","PeriodicalId":48393,"journal":{"name":"Journal of Economic Theory","volume":"226 ","pages":"Article 106017"},"PeriodicalIF":1.4,"publicationDate":"2025-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143887604","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Dynamic information design in an entry game","authors":"Xuelin Li , Martin Szydlowski , Fangyuan Yu","doi":"10.1016/j.jet.2025.106018","DOIUrl":"10.1016/j.jet.2025.106018","url":null,"abstract":"<div><div>We study dynamic Bayesian persuasion in an entry game. A sender publicly reveals information to an adopter and a competitor who decide when to irreversibly enter or exit a market. When the sender's loss from competition is small, the sender first provides information to attract the adopter, and then aims to reveal sufficiently negative information to deter the competitor. Otherwise, the optimal policy is reversed. The sender first aims to provide negative information to deter the competitor and then to reveal positive information to attract the adopter. We interpret the optimal policy as inducing hype cycles, and show that hype cycles are more severe in stagnant industries or with higher threat of competition.</div></div>","PeriodicalId":48393,"journal":{"name":"Journal of Economic Theory","volume":"226 ","pages":"Article 106018"},"PeriodicalIF":1.4,"publicationDate":"2025-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143903889","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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