Bayesian implementation in transferable utility environments, and other essays in microeconomic theory.

The dissertation is comprised of three distinct papers, linked primarily by their common basis in game theoretic modeling techniques. The aim of Chapter 1 is to characterize the set of implementable social choice rules in environments of incomplete information where utility is transferable. When agents' private information is distributed independently, a simple condition labeled positive association is shown to be necessary and almost sufficient for implementation. In fact, it is shown that well-known incentive compatibility conditions (which guarantee a weak form of implementability) are almost sufficient for strong implementation as well. These results echo those derived by Matsushima [33], but extend that work in two important respects. First, the analysis is extended beyond the traditional expected utility framework in which Matsushima operates. Second, a representation theorem is provided for those social choice rules that satisfy positive association. In Chapter 2, sufficient conditions are identified for the existence of a unique Nash equilibrium in a broad class of games of strategic substitutability. By utilizing lattice programming techniques, the role of these sufficient conditions is made transparent: the conditions ensure unique best responses and impose upper and lower bounds on the slopes of best response functions. The uniqueness result is applied to a series of quantity competition models. In the standard, homogeneous product model of Cournot, the sufficient conditions are shown to be a generalization of those identified by Gaudet and Salant (1991) and Long and Soubeyran (2000). New results are derived for models of quantity competition when firms produce differentiated products, and when firms compete simultaneously in multiple markets. Chapter 3 introduces a repeated game-theoretic model to establish a potentially efficiency enhancing role of the labor union. In a world in which employment contracts are incomplete, it is costly for a firm to establish credibility for honoring implicit terms of employment agreements. By monitoring the employment relationships between the firm and its workers, the labor union may provide the workforce with valuable information regarding the firm's adherence to these implicit agreements. Thus, the union provides a signaling mechanism which allows workers to coordinate their actions in order to discipline the firm for a breach of the implicit contract. This mechanism enhances the firm's credibility when forming employment contracts, and facilitates increased employment levels.Ph.D.Economic theorySocial SciencesUniversity of Michigan, Horace H. Rackham School of Graduate Studieshttp://deepblue.lib.umich.edu/bitstream/2027.42/125478/2/3016865.pd