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David Pérez-Castrillo

David Pérez-Castrillo
Autonomous University of Barcelona and Barcelona Graduate School of Economics

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94
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2,886
Citations

Publications

Publications (94)
Article
We define the proportional ordinal Shapley (the POSh) solution, an ordinal concept for pure exchange economies in the spirit of the Shapley value. Our construction is inspired by Hart and Mas-Colell's (1989) characterization of the Shapley value with the aid of a potential function. The POSh exists and is unique and essentially single-valued for a...
Article
Full-text available
We introduce the value-free (v-f) reductions, operators that map a coalitional game played by a set of players to another “similar” game played by a subset of those players. We propose properties that v-f reductions may satisfy, we provide a theory of duality, and we characterize several v-f reductions (among which the value-free version of the red...
Article
We consider a market where “standard” risk-neutral agents coexist with “goal-oriented” agents who, in addition to the expected income, seek a high-enough monetary payoff (the “trigger”) to fulfill a goal. We analyze a two-sided one-to-one matching model where the matching between principals and agents and incentive contracts are endogenous. In any...
Preprint
Full-text available
We consider a market where “standard” risk-neutral agents coexist with ”goal-oriented” agents who, in addition to the expected income, seek a high enough monetary payoff (the “trigger”) to fulfill a goal. We analyze a two-sided one-to-one matching model where the matching between principals and agents and incentive contracts are endogenous. In any...
Article
Full-text available
The theory of incentives and matching theory can complement each other. In particular, matching theory can be a tool for analyzing optimal incentive contracts within a general equilibrium framework. We propose several models that study the endogenous payoffs of principals and agents as a function of the characteristics of all the market participant...
Book
This volume in the Encyclopedia of Complexity and Systems Science, Second Edition, combines the main features of Game Theory, covering most of the fundamental theoretical aspects under the cooperative and non-cooperative approaches, with the procedures of Agent-Based Modeling for studying complex systems composed of a large number of interacting en...
Article
Full-text available
We analyze whether funding bodies are biased against diverse teams, which have often been linked to the production of transformative research. We develop a general framework that compares the drivers of success in the ex-ante grant decision process to the drivers of success in ex-post performance. We use our framework to systematically analyze the...
Article
The multiple partners game (Sotomayor, 1992) extends the assignment game to a matching model where the agents can have several partners, up to their quota, and the utilities are additively separable. The present work fills a gap in the literature of that game by studying the effects on agents’ payoffs caused by the entrance of new agents in the mar...
Article
Funding agencies tend to allocate (scarce) resources using a bottom-up competitive process. This paper analyzes the determinants and the consequences of the choices made in each of the stages of the funding process. We build on previous research (Banal-Estañol, Macho-Stadler, and Pérez-Castrillo 2013, 2018, and 2019) using, and present new results...
Article
Full-text available
We study the effect of analyst coverage on firms’ innovation strategy and outcome. Using data of US firms from 1990 to 2012, we find evidence that an increase in financial analysts leads firms to cut research and development expenses, acquire more innovative firms, and invest in corporate venture capital. We attribute the first result to the effect...
Article
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We analyze the manipulability of competitive equilibrium allocation rules for the simplest many-to-many extension of Shapley and Shubik’s (Int J Game Theory 1:111–130, 1972) assignment game. First, we show that if an agent has a quota of one, then she does not have an incentive to manipulate any competitive equilibrium rule that gives her her most...
Article
We propose the "average approach," where the worth of a coalition is a weighted average of its worth for different partitions of the players' set, as a unifying method to extend values for characteristic function form games. Our method allows us to extend the equal division value, the equal surplus value, the consensus value, the λ-egalitarian Shap...
Article
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We analyze the two-stage games induced by competitive equilibrium rules for the buyer–seller market of Shapley and Shubik (Int J Game Theory 1:111–130, 1972). In these procedures, first sellers and then buyers report their valuation and the outcome is determined by a competitive equilibrium outcome for the market reported by the agents. We provide...
Article
We use a two-sided matching framework to analyze collaboration between heterogeneous academics and firms. We consider both horizontal and vertical characteristics—those related to affinity (e.g., preferences for a type of scientific research) and those related to ability (e.g., capacity to produce high-quality scientific output). We build a unique...
Article
We study contests with private information and identical contestants, where contestants' efforts and innate abilities generate output of varying qualities. The designer's revenue depends on the quality of the output, and she offers a reward to the contestant achieving the highest quality. We characterize the equilibrium behavior, outcomes, and payo...
Article
We provide a theoretical framework to contribute to the current debate regarding the tendency of pharmaceutical companies to direct their R&D toward marketing products that are “follow-on” drugs of already existing drugs, rather than toward the development of breakthrough drugs. We construct a model with a population of patients who can be treated...
Article
Full-text available
We report on Marilda Sotomayor's extraordinay contribution to Matching Theory on the occasion of her 70th anniversary.
Article
We propose a model of investment, duration, and exit strategies for start-ups backed by venture capital (VC) funds that accounts for the high level of uncertainty, the asymmetry of information between insiders and outsiders, and the discount rate. Our analysis predicts that start-ups backed by corporate VC funds remain for a longer period of time b...
Article
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We consider issue-externality games in which agents can cooperate on multiple issues and externalities are present both within and across issues, that is, the amount a coalition receives in one issue depends on how the players are organized on all the issues. Examples of such games are several firms competing in multiple markets, and countries nego...
Article
We study the length of agreements in a market in which infinitely-lived firms contract with agents that live for two periods. Firms differ in the expected values of their projects, as do workers in their abilities to manage projects. Worker effort is not contractible and worker ability is revealed during the relationship. The market dictates the tr...
Article
Glossary Definition of the Subject Introduction The Base Game Moral Hazard Adverse Selection Future Directions Bibliography
Article
We propose a definition of egalitarian equivalence that extends Pazner and Schmeidler's (1978) concept to environments with incomplete information. If every feasible allocation rule can be implemented by an incentive compatible mechanism (as, for instance, in the case of non-exclusive information), then interim egalitarian equivalence and interim i...
Article
Full-text available
We study collaborative and non-collaborative projects that are supported by government grants. First, we propose a theoretical framework to analyze optimal decisions in these projects. Second, we test our hypotheses with a unique dataset containing academic publications and research funds for all the academics at the major engineering departments i...
Article
We propose a smooth multibidding mechanism for environments where a group of agents have to choose one out of several projects. Our proposal is related to the multibidding mechanism (Pérez-Castrillo and Wettstein, 2002) but it is “smoother” in the sense that small variations in an agent’s bids do not lead to dramatic changes in the probability of s...
Article
There are two main ways in which the knowledge created in universities has been transferred to firms: licensing agreements and the creation of spin-offs. In this paper, we describe the main steps in the transfer of university innovations, the main incentive issues that appear in this process, and the contractual solutions proposed to address them.
Article
Full-text available
We consider cooperative environments with externalities (games in partition function form) and provide a recursive definition of dividends for each coalition and any partition of the players it belongs to. We show that with this definition and equal sharing of these dividends the averaged sum of dividends for each player, over all the coalitions th...
Article
Full-text available
We study firms' corporate governance in environments where possibly heterogeneous shareholders compete for possibly heterogeneous managers. A firm, formed by a shareholder and a manager, can sign either an incentive contract or a contract including a Code of Best Practice. A Code allows for a better manager's control but makes manager's decisions h...
Article
"We provide a theoretical model about how to design academic spin-off contracts between the university technology transfer office (TTO), the researcher, and the venture capitalist. The optimal contract entails the allocation of founder shares to the researcher to secure her participation in the venture. It may also require the researcher to be fina...
Article
We develop a theoretical model to explain the specific role of Technology Transfer Offices (TTOs) in licensing university inventions. Using a framework where firms have incomplete information on the quality of inventions, we develop a reputation argument for the TTO to reduce the asymmetric information problem. Our results indicate that a TTO is of...
Article
Economic activities, both on the macro and micro level, often entail wide-spread externalities. This in turn leads to disputes regarding the compensation levels to the various parties affected. We propose a method of deciding upon the distribution of the gains (costs) of cooperation in the presence of externalities when forming the grand coalition...
Article
[Pérez-Castrillo, D., Wettstein, D., 2002. Choosing wisely: a multibidding approach. American Economic Review 5, 1577-1587.] and [Veszteg, R.F., 2004. Multibidding game under uncertainty. Working paper 14/04. Universidad de Navarra.] propose the use of a multibidding mechanism for situations where agents have to choose a common project. Examples ar...
Article
Full-text available
We analyze a model where firms chose a production technology which, together with some random event, determines the final emission level. We consider the coexistence of two alternative technologies: a "clean" technology, and a "dirty" technology. The environmental regulation is based on taxes over reported emissions, and on penalties over unreporte...
Article
We implement a family of efficient proposals to share benefits generated in environments with externalities. These proposals extend the Shapley value to games with externalities and are parametrized through the method by which the externalities are averaged. We construct two slightly different mechanisms: one for environments with negative external...
Article
Full-text available
We study a sequential protocol of endogenous coalition formation based on a process of bilateral agreements among the players. We apply the game to a Cournot environment with linear demand and constant average costs. We show that the final outcome of any subgame perfect equilibrium of the game is the grand coalition, provided the initial number of...
Article
Full-text available
We propose an agency model based on competitive markets in order to analyse an economy with several homogeneous principals and heterogeneous agents. We model the principal-agent economy as a two-sided matching game and characterise the set of stable outcomes (equilibria) of this market. In this regard we generalise the assignment game of Shapley an...
Article
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We propose a simple mechanism that implements the Ordinal Shapley Value (Pérez-Castrillo and Wettstein 2005) for economies with three or less agents.
Article
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In this paper, we present a review of the literature on optimal auditing of tax evasion and we fill some existing gaps with new results. The main contribution is to give a unified vision on the optimal audit policy when the Agency can pool the taxpayers as a function of the main activity they obtain the income from (because it determines their inco...
Article
We develop and implement a collocation method to solve for an equilibrium in the dynamic legislative bargaining game of Duggan and Kalandrakis (2008). We formulate the collocation equations in a quasi-discrete version of the model, and we show that the collocation equations are locally Lipchitz continuous and directionally differentiable. In numeri...
Article
In a market where firms with different characteristics decide upon both the level of emissions and their reports, we study the optimal audit policy for an enforcement agency whose objective is to minimize the level of emissions. We show that it is optimal to devote the resources primarily to the easiest-to-monitor firms and to those firms that valu...
Article
Full-text available
Economic activities, both on the macro and micro level, often entail wide-spread externalities. This in turn leads to disputes regarding the compensation levels to the various parties affected. We propose a general, yet simple, method of deciding upon the distribution of the gains (costs) of cooperation in the presence of externalities. This method...
Article
We suggest a simple sequential mechanism whose subgame perfect equilibria give rise to efficient networks. Moreover, the payoffs received by the agents coincide with their Shapley value in an appropriately defined cooperative game.
Article
It is often argued that, even if optimal "ex post", settlement dilutes deterrence "ex ante". We analyse the interest for the tax authority of committing, "ex ante", to a settlement strategy. We show that to commit to the use of settlements is "ex ante" optimal when the tax authority receives signals that provide statistical information about the ta...
Article
Full-text available
En este artículo, presentamos una revisión de la literatura sobre las políticas óptimas de inspección fiscal y completamos algunas lagunas existentes con resultados novedosos. La aportación fundamental es dar una visión unificada sobre la política óptima de inspección cuando la Agencia Tributaria puede agrupar a los contribuyentes en función de la...
Article
We propose a new solution concept to address the problem of sharing a surplus among the agents generating it. The problem is formulated in the preferences-endowments space. The solution is defined recursively, incorporating notions of consistency and fairness and relying on properties satisfied by the Shapley value for transferable utility (TU) gam...
Article
Full-text available
Propomos o seguinte mecanismo para o assignment game: os vendedores, simultaneamente, fixam seus preços. Então, um após o outro, os compradores decidem que objetos comprar, se houver algum. A primeira fase do jogo determina os preços dos objetos que forem vendidos, enquanto a segunda fase determina o matching real. Provamos que o conjunto dos equil...
Article
Full-text available
We propose a model based on competitive markets in order to analyse an economy with several homogeneous landlords and heterogeneous tenants. We model the landlord- tenant economy as a two-sided matching game and characterise the equilibrium of this market. In equilibrium, contracts are Pareto optimal, and the incremental surplus generated in a land...
Article
Full-text available
We study a sequential protocol of endogenous coalition formation based on a process of bilateral agreements among the players. We apply the game to a Cournot environment with linear demand and constant average costs. We show that the final outcome of any Subgame Perfect Equilibrium of the game is the grand coalition, provided the initial number of...
Article
For the assignment game, we analyze the following mechanism. Sellers, simultaneously, fix their prices first. Then buyers, sequentially, decide which object to buy. Also, each buyer may report his or her indifferences (along with the previous buyers' indifferences) to the following buyer. The first phase determines the potential prices, while the s...
Article
This paper is a first step in analysing the use of statistical information about taxpayers' incomes by tax audit authorities. In a very simple model, we consider the design of the audit strategy when the tax authority can commit to it and has free access to a signal correlated with the taxpayer's true income. We discuss the optimal enforcement poli...
Article
Full-text available
We analyze situations in which a group of agents (and possibly a designer) have to reach a decision that will affect all the agents. Examples of such scenarios include the selection of a candidate, the location of a nuclear reactor or the siting of a major sports event. To address the problem of reaching a decision, we propose a one-stage multi-bid...
Article
Full-text available
We propose a model based on competitive markets in order to analyze an economy with several principals and agents. We model the principal-agent economy as a two-sided matching game and characterize the set of stable outcomes of this principal-agent matching market. A simple mechanism to implement the set of stable outcomes is proposed. Finally, we...
Book
In this revised second edition, An Introduction to the Economics of Information covers the consequences for the character and efficiency of the interaction between individuals and organizations when one party has more or better information on some aspect of the relationship. This is the condition of asymmetric information, under which the informati...
Article
In this paper we carefully link knowledge flows to and from a firm’s innovation process with this firm’s investment decisions. We present a model of a leading technological firm facing a competitive fringe. The leading firm considers three types of investments: investments in applied research, investments in basic research, and investments in intel...
Article
Full-text available
We analyze situations in which a group of agents (and possibly a designer) have to reach a decision that will affect all the agents. Examples of such scenarios are the location of a nuclear reactor or the siting of a major sport event. To address the problem of reaching a decision, we propose a one-stage multi-bidding mechanism where agents compete...
Article
We propose a simple mechanism to determine how the surplus generated by cooperation is to be shared in zero-monotonic environments with transferable utility. The mechanism consists of a bidding stage followed by a proposal stage. We show that the subgame perfect equilibrium outcomes of this mechanism coincide with the vector of the Shapley value pa...
Article
We propose two simple mechanisms that implement two bargaining sets in super-additive environments. The first bargaining set is a close variation of the one proposed by L. Zhou (1994, Games Econom. Behav.6, 512–526), and the second is the Pareto optimum payoffs of the A. Mas-Colell (1989, J. Math. Econom.18, 129–139) bargaining set. We adopt a simp...
Article
We consider a cost-reimbursement or a cost-sharing procurement contract between the administration and a firm. The firm privately learns the true cost overrun once the project has started and it can manipulate this information. We characterize the optimal auditing policy of cost overrun claims as a function of the initial contractual payment, the s...
Article
We present a dynamic model of tax evasion, where tax liabilities last for two periods and the probability of an inspection decreases with the sum of taxes evaded this period plus taxes evaded last period. We show that a tax amnesty that pardons more than the evasion penalties (an extensive amnesty) can temporarily improve compliance. Whenever the i...
Article
The authors analyze multilateral tariff negotiations as a game in coalition form. In a model with three identical countries that produce and trade an homogeneous commodity and where countries' aggregated welfare can weight differently their different components, they analyze how changes in the countries' objective affects the stability of coalition...
Article
The authors study the optimal allocation of the contracting capacity in a moral hazard environment. Centralizing is superior when the principal is able to establish all the contracts with the agents simultaneously and she is able to monitor side contracting between the agents. Otherwise, decentralizing can be a superior strategy. The authors apply...
Article
Full-text available
We implement the core correspondence in Subgame Perfect Equilibrium using a simple sequential mechanism in which firms propose a salary to each worker (in the first stage). Then , each worker accepts at most one proposal (second stage). Moreover, we show that, if agents' preferences are additive, this mechanism implements in Subgame Perfect Equilib...
Article
We implement the stable correspondence of a job matching market in Subgame Perfect Equilibrium. We use a simple sequential mechanism in which firms propose a salary to each worker (first stage) and, then, each worker accepts at most one proposal (second stage). Moreover, if agents' preferences are additive, this mechanism implements in Subgame Perf...
Article
Research joint ventures (RJVs) usually face technical uncertainty, their expected cost typically depending on the know-how disclosed by the partners. However, the partners have little incentive to share their know-how when they are simultaneously competitors in other markets. In this setting, we show that sometimes profitable RJVs do not start when...
Article
The optimal enforcement policy when households are heterogeneous, with respect to both income level and to income source, leads to more intense income auditing for easy to-monitor sources. The authors obtain the common result that within each income source any taxpayer reporting less than a predetermined cut-off level will be audited, while taxpaye...
Article
R&D is both an activity which involves team effort, and with many of the features of a zero-sum game. This paper shows that these characteristics make the labor market for researchers unstable in the sense that firms have incentives to continuously change the composition of their research teams. Related results concerning the core of several cooper...
Article
In a situation in which people who are required to fill in a tax-return coexist with tax-return-exempt people, we prove that the optimal audit policy leads to different tax compliance behavior, depending on the difficulty of detecting an evader who does not fill in a tax return, passing himself of as a non-taxpayer.
Article
This paper analyzes the contract terms of licensing agreements, based on a sample of contracts of transmission of technology between Spanish and foreign firms. It also presents a model that is in accordance with some stylized facts. We will focus our attention on the elements that explain the contract terms. In particular we analyze the consequence...
Article
Full-text available
The paper analyses a spatial competition model of the banking sector. Banks offer two kind of services (deposits and credit) and can either borrow or lend on the money market. We investigate the consequences of the regulation of rates paid on deposits. The main conclusions are as follows. Regulation first increases network size beyond social optimu...
Article
The optimal enforcement policy when households are heterogeneous, with respect to both income level and to income source, leads to more intense income auditing for easy-to-monitor sources. We obtain the common result that within each income source any taxpayer reporting less than a predetermined cut-off level will be audited, while taxpayers report...
Article
Full-text available
This paper shows the equivalence between the stable solution set of any cooperative game in characteristic form (G1) and the subgame perfect Nash equilibria in pure strategies of a certain noncooperative game (G2). Players of G1 are named "agents." G2 is played by different players ("principals") who compete in wages to attract agents. The equivale...
Article
We consider a situation in which a principal hires two agents whose cooperation is technically profitable and study three models that incorporate different assumptions about the agents' cooperative behavior. We find a close relationship betwee,t the agents' commitment capacity ;qd the characteristics of the optimal contraci. A greater capacity to c...
Article
In this paper, the authors reconsider the basic model of "efficient rent-seeking." They stress the importance of the shape of the players' reaction curve in order to understand the impact of the technology of rent-seeking on the structure of the outcome of the game. The authors give a complete characterization of the pure strategy equilibria. Moreo...
Article
[fre] Le rôle de la délégation dans une relation d'agence, . par Inès Macho-Stadler, J. David Pérez-Castrillo.. . Cet article analyse deux modèles d'agence dans lesquels un principal engage un agent pour fournir un effort productif non observable. Or le principal doit lui même fournir un effort, de supervision ou de production, non verifiable, qui...
Article
Dans ce travail on s'interroge sur la forme prise par les contrats de licence en présence d'information asymétrique. On montre que si l'information privée est détenue par le propriétaire, alors les contrats de licence basés sur les paiements à la pièce signalent des bonnes innovations, alors que, quand la partie la mieux informée est l'acheteur, le...
Article
We consider a situation in which a principal hires two agents whose cooperation is profitable from a technical point of view. The characteristics of the optimal contract are strongly dependent on the agents' commitment capacity, that allows them to reach more efficient outcomes.
Article
We consider a situation in which a principal hires two agents whose cooperation is technically profitable and study three models that incorporate different assumptions about the agents' cooperative behavior. We find a close relationship between the agents' commitment capacity and the characteristics of the optimal contract. A greater capacity to co...
Article
This paper deals with the form of licencing contracts when there is asymmetric information. We show that when the licensor has private information he can signals the high quality patents through contracts based on royalties. Conversely, when the licensee has more information about the value of the patent, contracts including only a fixed fee attrac...
Article
[fre] La structure industrielle dans une course au brevet avec coûts fixes et coûts variables. . Dans cet article, on étudie un modèle de course au brevet qui intègre explicitement des coûts fixes et des coûts variables dans la technologie de R&D. On obtient des résultats qui généralisent les conclusions des modèles de Loury [1979] et de Lee-Wilde...
Article
Résumé Cet article étudie un modèle principal-agent dans lequel se pose un problème de double risque moral: ni le comportement de l'agent ni celui du principal sont des variables vérifiables. On montre que si le principal doit fournir un effort qui affecte les intérêts de l'agent, iltrouve alors toujours profitable de déléguer cette tâche à une tie...
Article
Full-text available
In this paper, we provide further support for the family of average values for games with externalities de…ned in Macho-Stadler et al. (2007). This is a large family of values that includes several recent proposals. We show that they can be constructed through the sharing of appropriately de…ned dividends. Furthermore, we show the ‡exibility of thi...
Article
Full-text available
• Objective: The students must realize that many forms of economic interaction involve problems of asymmetric information, and should be able to differentiate between problems of moral hazard and adverse selection. The students should be able to handle simple models that capture various kinds of informational asymmetry and propose ways to solve or...
Article
Description The course concentrates in the foundations of Industrial Organization. Most attention is devoted to oligopoly theory where we find static models of industry conduct and performance. Objective The student should learn the basic models of pricing in markets with few competitors. The course provides the tools to analyze the structure of ma...
Article
Thesis (doctoral)--Ecole des hautes études en sciences sociales, 1991.

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