Essays in applied microeconomic theory

The first chapter examines joint bidding in auctions with strong valuations asymmetries across bidders. With one cartel, the cartel leader can attract disadvantaged bidders and acquire information about the common value at no cost. With multiple competing cartels, cartel leaders also compete to attract regular bidders to become better informed at a low cost. A seller always prefers a large symmetric cartel structure.

The second chapter provides a new approach to the issues of existence, uniqueness and comparative statics of Cournot equilibrium by using the properties of a fictitious objective function. We rederive a number of existing results, and develop some general second-order properties for the equilibrium profit and social welfare functions with respect to the number of firms and the unit cost.

The third chapter investigates the effects of increased transparency on prices in the Bertrand duopoly model. Market transparency is defined as the proportion of consumers that are fully informed about the market. When prices are strategic complements, they decrease with market transparency. When prices are strategic substitutes, an increase in market transparency may lead to an increase in one of the prices, which implies ambiguous effects on both consumer welfare and firms' profits.

The fourth chapter examines a two-period R&D model where know-how flows only from the high R&D firm to the low R&D firm. Though firms are ex-ante identical, one obtains a unique asymmetric equilibrium in R&D investments, leading to heterogeneity in the industry. The second-best welfare analysis shows that the joint lab yields a socially optimal R&D level subject to an equal treatment (of firms) constraint.