Collective action on an endogenous network (Job market paper)
Abstract: When an individual agent holds social-relevant information that is worthwhile sharing, how do non-cooperative agents coordinate to maximize the diffusion of the information? I present a model of network formation in an environment where agents balance their private costs of link formation against their social benefits. The social benefit from a link is assumed alternatively to depend on (i) the total number of agents the link allows to connect either directly or indirectly; or (ii) how close the link brings agents to each others. An agent’s payoff is equal to a reward common to all agents, and whose value depends on (i) the reach or (ii) the closeness of all agents, minus the cost he privately incurs for each link he initiates. This allows me to formulate the game as a non-cooperative game. When only the reach of the agents matter, the strict Nash networks are wheel networks that may or may not include all agents. When the closeness of the agents matter, the equilibrium networks have the architecture of a flower network or that of a disconnected variant of a flower network.
Keywords: network, public good, potential game.
​
A theory on the carrot and the stick: how contracting for the rights on an offence performs as a marginal deterrent
Abstract: If your neighbor intends to cause you harm, how could you dissuade him? You would first threaten him to take the case to court, which makes him run the risk to be fined. If he is deterred, this is what scholars refer to as the marginal deterrence of the sanction. What if he is still not deterred? You two could simply negotiate the right over the harmful action. I show that, during the contract making stage, the threat of sanction helps in shifting part of the negotiating power away from the beneficiary of the harmful action to the victim. And that the possibility of contracting over the ownership of an act punished by law increases the scope of deterrence.
​
Keywords: tort law, contracts, negative externality, marginal deterrence.
Secret Rebates and List Prices in Negotiations between Countries and Pharmaceutical Firms (co-written with Sidartha Gordon)
Abstract: This paper clarifies the reasons for and function of secret rebates in the negotiation over drug prices between suppliers and institutional payers (countries). For a pharmaceutical monopoly producer, hiding the net price charged to a payer, by only making the list price observable, has a simple motivation: if negotiations are carried out sequentially, secrecy on the net price charged to a payer prevents subsequent ones from claiming for no less advantageous deals. For the country, rebates lead to a less effective access to the drug than the analogous list price reduction. We provide a model of this interaction and characterize the set of Pareto-efficient and individually rational trades between a country and the firm. We also provide conditions under which such trades involve secret rebates.
​
Keywords: drug price negotiation, secret rebate, list price, reference pricing.
​
Asymmetric Information in Markets for Pharmaceutical Drugs : International Price Referencing and Secret Rebates (co-written with Sidartha Gordon)
Abstract: We build a model where two countries negotiate sequentially with a firm. The firm holds private information on the date at which the drug will become obsolete because of the entry of a superior substitute, which affects its willingness to accept a lower price in exchange for an earlier deal. The information contained in the list price agreed with the first country enables the second country to extract a greater surplus from the firm. As a result, if it is farsighted, the firm is then more reluctant to accept a low offer from the first country which reduces its surplus, making a high list price coupled with a secret rebate an attractive option for the first country and for the firm.
Keywords: negotiation game, asymmetric information, reference pricing.
​
Presentation Slides