Scholars@Duke
Giuseppe Lopomo

Giuseppe Lopomo

Alan D. Schwartz Distinguished Professor of Business Administration
Fuqua School of Business
giuseppe.lopomo@duke.edu
Box 90120, Durham, NC 27708-0120
A406 Fuq Sch of Bus, Durham, NC 27708

Selected Publications

Optimal Procurement with Quality Concerns

Journal Article American Economic Review · June 1, 2023 Adverse selection in procurement arises when low-cost bidders are also low-quality suppliers. We propose a mechanism called LoLA (lowball lottery auction) which, under some conditions, maximizes any combination of buyer’s and social surplus, subject to inc ... Full text Cite

Detectability, duality, and surplus extraction

Journal Article Journal of Economic Theory · September 1, 2022 We study surplus extraction in the general environment of McAfee and Reny (1992), and provide two alternative proofs of their main theorem. The first is an analogue of the classic argument of Crémer and McLean (1985, 1988), using geometric features of the ... Full text Cite

Uncertainty and robustness of surplus extraction

Journal Article Journal of Economic Theory · January 1, 2022 This paper studies a robust version of the classic surplus extraction problem, in which the designer knows only that the beliefs of each type belong to some set, and designs mechanisms that are suitable for all possible beliefs in that set. We derive neces ... Full text Cite

Mechanism Design for Correlated Valuations: Efficient Methods for Revenue Maximization

Journal Article Operations Research · January 1, 2022 Traditionally, the mechanism design literature has been primarily focused on settings where the bidders' valuations are independent. However, in settings where valuations are correlated, much stronger results are possible. For example, the entire surplus o ... Full text Cite

Optimal financial contracting and the effects of firm's size

Scholarly Edition · June 1, 2021 We consider the design of the optimal dynamic policy for a firm subject to moral hazard problems. With respect to the existing literature we enrich the model by introducing durable capital with partial irreversibility, which makes the size of the firm a st ... Full text Cite

Resource allocation under demand uncertainty and private information

Journal Article Management Science · December 1, 2017 We study the effect of multilateral private information on the efficiency of markets where capacity-constrained upstream agents supply a resource to downstream entities facing uncertain end-demands. We analyze two models: a "pooling system," in which a sin ... Full text Cite

Maximizing revenue with limited correlation: The cost of ex-post incentive compatibility

Conference 30th Aaai Conference on Artificial Intelligence Aaai 2016 · January 1, 2016 In a landmark paper in the mechanism design literature, Cremer and McLean (1985) (CM for short) show that when a bidder's valuation is correlated with an external signal, a monopolistic seller is able to extract the full social surplus as revenue. In the o ... Cite

Assessing the robustness of Cremer-McLean with automated mechanism design

Conference Proceedings of the National Conference on Artificial Intelligence · June 1, 2015 In a classic result in the mechanism design literature, Cremer and McLean (1985) show that if buyers' valuations are sufficiently correlated, a mechanism exists that allows the seller to extract the full surplus from efficient allocation as revenue. This r ... Cite

Stairway to heaven or highway to hell: Liquidity, sweat equity, and the uncertain path to ownership

Scholarly Edition · March 1, 2013 We study a setting in which a principal contracts with an agent to operate a firm over an infinite time horizon when the agent is liquidity constrained and privately observes the sequence of cost realizations. We formulate the principal's problem as a dyna ... Full text Cite

Bidder collusion at first-price auctions

Journal Article Review of Economic Design · September 1, 2011 We show that in simple environments, a bidding ring operating at a first-price sealed-bid auction cannot achieve any gains relative to non-cooperative bidding if the ring is unable to control the bids that its members submit at the auction. This contrasts ... Full text Cite

Knightian uncertainty and moral hazard

Journal Article Journal of Economic Theory · May 1, 2011 This paper presents a principal-agent model in which the agent has imprecise beliefs. We model this situation formally by assuming the agent's preferences are incomplete as in Bewley (1986) [2]. In this setting, incentives must be robust to Knightian uncer ... Full text Cite

The economics of contingent re-auctions

Journal Article American Economic Journal Microeconomics · May 1, 2011 We consider an auction environment where an object can be sold with usage restrictions that generate benefits to the seller but decrease buyers' valuations. In this environment, sellers such as the FCC have used "contingent re-auctions,"offering the restri ... Full text Cite

Carbon allowance auction design: An assessment of options for the United States

Journal Article Review of Environmental Economics and Policy · January 1, 2011 Carbon allowance auctions are a component of existing and proposed regional cap-and-trade programs in the United States and are also included in recent proposed bills in the U.S. Congress that would establish a national cap-and-trade program to regulate gr ... Full text Cite

Multidimensional mechanism design: Finite-dimensional approximations and efficient computation

Journal Article Operations Research · July 1, 2010 Multidimensional mechanism design problems have proven difficult to solve by extending techniques from the onedimensional case. This paper considers mechanism design problems with multidimensional types when the seller's cost function is not separable acro ... Full text Open Access Cite

Non-cooperative entry deterrence in license auctions: Dynamic versus sealed bid

Journal Article Journal of Industrial Economics · June 1, 2010 We examine the impact of potential entry on incumbent bidding behavior in license auctions, in both dynamic and sealed bid formats. Unlike sealed bid auctions, dynamic auctions reveal information about the identities of potential winners and allow bidders ... Full text Cite

NON-COOPERATIVE ENTRY DETERRENCE IN LICENSE AUCTIONS: DYNAMIC VERSUS SEALED BID

Journal Article The Journal of Industrial Economics · June 2010 We examine the impact of potential entry on incumbent bidding behavior in license auctions, in both dynamic and sealed bid formats. Unlike sealed bid auctions, dynamic auctions reveal information about the identities of potential winners and allow bidde ... Cite

Split-award procurement auctions with uncertain scale economies: Theory and data

Journal Article Games and Economic Behavior · May 1, 2010 In a number of observed procurements, the buyer has employed an auction format that allows for a split-award outcome. We focus on settings where the range of uncertainty regarding scale economies is large and, depending on cost realizations, the efficient ... Full text Cite

The 'Google effect' in the FCC's 700 MHz auction

Journal Article Information Economics and Policy · June 1, 2009 We describe and interpret bidding behavior in FCC Auction 73 for the C-block licenses. These licenses were initially offered subject to an open platform restriction, which was highly valued by firms such as Google. Google entered bids until its bids reache ... Full text Cite

The [`]Google effect' in the FCC's 700 MHz auction

Journal Article · June 2009 We describe and interpret bidding behavior in FCC Auction 73 for the C-block licenses. These licenses were initially offered subject to an open platform restriction, which was highly valued by firms such as Google. Google entered bids until its bids reache ... Cite

Simultaneous ascending auctions with complementarities and known budget constraints

Journal Article Economic Theory · January 1, 2009 We study simultaneous ascending auctions of two identical objects when bidders are financially constrained and their valuations exhibit complementarities. We assume the budget constraints are known but the values for individual objects are private informat ... Full text Cite

Budget constraints and demand reduction in simultaneous ascending-bid auctions

Journal Article Journal of Industrial Economics · March 1, 2008 The possibility, even if arbitrarily small, of binding budget constraints in simultaneous ascending bid auctions induces strategic demand reduction and generates significant inefficiencies. Under mild conditions on the distributions of the bidders' values, ... Full text Cite

BUDGET CONSTRAINTS AND DEMAND REDUCTION IN SIMULTANEOUS ASCENDING-BID AUCTIONS

Journal Article The Journal of Industrial Economics · March 2008 The possibility, even if arbitrarily small, of binding budget constraints in simultaneous ascending bid auctions induces strategic demand reduction and generates significant inefficiencies. Under mild conditions on the distributions of the bidders' val ... Cite

Efficient mechanisms for mergers and acquisitions

Journal Article International Economic Review · August 1, 2007 We characterize incentive-efficient merger outcomes when payments can be made both in cash and stock. Each firm has private information about both its stand-alone value and a component of the (possibly negative) potential synergies. We study two cases: whe ... Full text Cite

Delegating management to experts

Journal Article RAND Journal of Economics · September 2006 Cite

Delegating management to experts

Journal Article RAND Journal of Economics · January 1, 2006 Owners of property and assets frequently delegate decisions about operating and maintaining their property to managers who are better informed about local market conditions. We analyze how owners optimally contract with managers who vary in their expertise ... Full text Cite

Inefficiency of collusion at english auctions

Journal Article Contributions to Theoretical Economics · January 1, 2005 In its attempts to deter and prosecute big rigging, U.S. antitrust authorities have focused on sealed-bid procurements, rather than on ascending-bid auctions. One possible justification for this focus is the idea, supported by the existing theoretical lite ... Full text Cite

Merger Mechanisms

Scholarly Edition · 2004 A firm can merge with one of n potential partners. The owner of each firm has private information about both his firm's stand-alone value and a component of the synergies that would be realized by the merger involving his firm. We characterize incentive ... Cite

Collusion via signalling in simultaneous ascending bid auctions with heterogeneous objects, with and without complementarities

Journal Article Review of Economic Studies · January 1, 2002 Collusive equilibria exist in simultaneous ascending bid auctions with multiple objects, even with large complementarities in the buyers' utility functions. The bidders collude by dividing the objects among themselves, while keeping the prices low. In the ... Full text Cite

Bargaining, interdependence, and the rationality of fair division

Journal Article RAND Journal of Economics · January 1, 2001 We consider two-person bargaining games with interdependent preferences and bilateral incomplete information. We show that in both the ultimatum game and the two-stage alternating-offers game, our equilibrium predictions are consistent with a number of rob ... Full text Cite

Optimality and robustness of the English auction

Journal Article Games and Economic Behavior · January 1, 2001 In Milgrom and Weber's (1982, Econometrica 50, 1089-1122) "general symmetric model," under a few additional regularity conditions, the English auction maximizes the seller's expected profit within the class of all posterior-implementable trading procedures ... Full text Cite

The English Auction Is Optimal Among Simple Sequential Auctions

Journal Article Journal of Economic Theory · September 1, 1998 With private and affiliated buyer's values, the English auction maximizes the seller's expected profit within a large family of sequential bidding mechanisms, named "Simple Sequential Auctions."Journal of Economic LiteratureClassification Numbers: D44, D82 ... Full text Cite

Regulatory pricing rules to neutralize network dominance

Journal Article Industrial and Corporate Change · January 1, 1996 This paper evaluates the effectiveness of several pricing rules intended to promote entry into a network industry dominated by an incumbent carrier. Drawing on the work of Cournot and Hotelling, we develop a model of competition between two interconnected ... Full text Cite