Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. AbstractWe examine the design of incentive-compatible screening mechanisms for dynamic environments in which the agents' types follow a (possibly non-Markov) stochastic process, decisions may be made over time and may a¤ect the type process, and payo¤s need not be time-separable.We derive a formula for the derivative of an agent's equilibrium payo¤ with respect to his current type in an incentive-compatible mechanism, which summarizes all …rst-order conditions for incentive compatibility and generalizes Mirrlees's envelope formula of static mechanism design. We provide conditions on the environment under which this formula must hold in any incentivecompatible mechanism. When specialized to quasi-linear environments, this formula yields a dynamic "revenue-equivalence" result and an expression for dynamic virtual surplus, which is instrumental for the design of optimal mechanisms. We also provide some su¢ cient conditions for incentive compatibility, and for its robustness to an agent's observation of the other agents' past and future types. We apply these results to a number of novel settings, including the design of pro…t-maximizing auctions and durable-good selling mechanisms for buyers whose values follow an AR(k) process. JEL Classi…cation Numbers: D82, C73, L1.

We develop an equilibrium search model of innovation with the possibility of multiple independent discovery. We distinguish innovations from ideas, and we view patents as probabilistic property rights that are constrained by the innovators' option to keep the innovation secret. We find that the patent system can simultaneously stimulate innovation, information disclosure and welfare. An optimal patent may provide more or less protection than secrecy, and in many cases, it provides less, suggesting that its main function is information spreading rather than rewarding the costs of the innovative activity.

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Global games of regime change-coordination games of incomplete information in which a status quo is abandoned once a sufficiently large fraction of agents attack ithave been used to study crises phenomena such as currency attacks, bank runs, debt crises, and political change. We extend the static benchmark examined in the literature by allowing agents to take actions in many periods and to learn about the underlying fundamentals over time. We first provide a simple recursive algorithm for the characterization of monotone equilibria. We then show how the interaction of the knowledge that the regime survived past attacks with the arrival of information over time, or with changes in fundamentals, leads to interesting equilibrium properties. First, multiplicity may obtain under the same conditions on exogenous information that guarantee uniqueness in the static benchmark. Second, fundamentals may predict the eventual fate of the regime but not the timing or the number of attacks. Finally, equilibrium dynamics can alternate between phases of tranquility-where no attack is possible-and phases of distress-where a large attack can occur-even without changes in fundamentals.

I n this paper, we study the feasibility of efficient contracting in dynamic environments. For concreteness, we cast the analysis in the context of a (finitely or infinitely) repeated bilateral trade problem, such as the one faced by the supplier and the buyer of a service, which can be provided in multiple periods. A natural benchmark for such problems is given by the impossibility theorem of Myerson and Satterthwaite (1983): In a one-shot interaction with two-sided private information, there do not exist satisfactory trading mechanisms, that is, mechanisms that achieve efficient trade while being incentive compatible, individually rational, and budget balanced. We characterize informational conditions under which this negative result is overturned when the agents can trade more than once.A dynamic setting brings about two novel features. First, the agents' privately known values may change over time, with the resulting process exhibiting some form of serial dependence. Second, the agents may have private information about this process beyond just knowing their values for the current transaction. For instance, the seller of a service may have superior information not only about his current cost, but also about his long-run average cost, or about the likelihood of shocks to his cost structure. In order to accommodate such multidimensional asymmetric information, we model the agents' values as evolving over time according to a pair of Markov processes, the parameters of which may be part of the agents' initial private information along with the starting values of the processes.