Oleksii Birulin (2003), “Public Goods with Congestion: A Mechanism Design Approach,” mimeo, Penn State University.

I consider the problem of the efficient provision of the public good with congestion in a setting with asymmetric information. I show, in particular, that when congestion is taken into account, in a wide class of economies it is possible to construct an incentive compatible mechanism that always produces the good at the efficient level, balances the budget and satisfies voluntary participation constraints. This result is in contrast with the corresponding impossibility result for pure public goods due to Mailath and Postlewaite (1990) and Rob (1989). Article in PDF format.
 

 

Oleksii Birulin (2003), “Inefficient Ex-Post Equilibria in Efficient Auctions,” Economic Theory, 22/3, pp. 675-683.

Abstract

I consider efficient auctions in the setting with interdependent and asymmetric values and show that every auction that implements efficient allocation in ex-post equilibrium also has a continuum of inefficient ex-post equilibria in undominated strategies. Article in PDF format.
 

 

Oleksii Birulin and Sergei Izmalkov (2003), “On Efficiency of the English Auction,” mimeo, Penn State University and MIT, also available through SSRN working papers link.

We study efficiency properties of a single-object irrevocable exit English auction in the setting with interdependent and asymmetric values. Maskin (1992) shows that the pairwise single-crossing condition is both necessary and sufficient for efficiency of the English auction with two bidders. This paper extends both Maskin's result and the single-crossing condition to the case of N bidders. We introduce the generalized single crossing (GSC), a fairly intuitive extension of the pairwise single-crossing and show that GSC is both necessary and sufficient condition for the existence of an efficient equilibrium in the N-bidder English auction. Article in PDF format.

 

Oleksii Birulin (2002), “Dynamic All-Pay Dollar Auction with Asymmetric Information,” work in progress, Penn State University.

I analyze a dynamic all-pay auction where the two bidders can alternate and raise their bids competing for the indivisible prize of a common value (a dollar bill). Experimental investigation of this game demonstrates that bidders almost always engage in an escalation of bids and frequently end up paying for the dollar more than a dollar. Previous theoretical studies suggest, however, that this is inconsistent with rationality, rational bidders should, instead, finish the game in the first round. I consider the all-pay auction in the setting, where the budget constraint is the bidder's private information, and present an equilibrium where bidders escalate, stay in the game for many rounds and may pay for the prize more than its (commonly known) value.

 

Oleksii Birulin and Sergei Izmalkov (2002), “Efficient Equilibria in the Asymmetric English Auction,” work in progress, Penn  State University and MIT.

Abstract

We consider the single-object English auction in the environment with interdependent and asymmetric value functions. Birulin & Izmalkov (2003), introduces the generalized single crossing condition and shows that whenever it is violated the English auction posses no efficient equilibrium. This paper provides a full characterization of efficient equilibria of the English auctions. We show that in the English auction with two bidders the efficient equilibrium is unique and in the English auction with N bidders all efficient equilibria belong to the very restricted class.