Nicolas
Melissas
Welcome to my homepage. I finished my PhD in March 2000 at the Universite Libre de Bruxelles under the supervision of Prof. Mathias
Dewatripont. After a post-doctoral stay in Barcelona, I took up a job as
lecturer at the University of Leicester (UK). Since
2006 I work in ITAM, Mexico-city.
Published Papers
1. Herd Behaviour as an Incentive Scheme, Economic Theory, 26
(3), October 2005, pp. 517 - 536
Abstract
We introduce herding in a model
subject to public-good problems. We show how herding, by reducing free-rider
problems, may increase efficiency.
2.
Informational Cascades Elicit Private Information, (Joint with Olivier Gossner) International
Economic Review, 47 (1), February 2006, pp. 297 - 325
Abstract
We introduce cheap talk in
a dynamic investment model with information externalities. We first show how
social learning adversely affects the credibility of cheap talk messages. Next,
we show how an informational cascade makes truthtelling
incentive compatible. A separating equilibrium only exists for high surplus
projects. Both an investment subsidy and an investment tax can increase
welfare. The more precise the sender's information, the
higher her incentives to truthfully reveal her private information.
3.
Equilibria
in a Dynamic Global Game: The Role of Cohort Effects, (Joint with Paul
Heidhues) Economic Theory, 28 (3), August 2006, pp. 531 - 557
Abstract
We introduce strategic waiting in a
global game setting with irreversible investment. Players can wait in order to
make a better informed decision. We allow for cohort effects and discuss when
they arise endogenously in technology adoption problems with positive
contemporaneous network effects. Formally, cohort effects lead to intra-period
network effects being greater than inter-period
network effects. Depending on the nature of the cohort effects, the dynamic
game may or may not satisfy dynamic increasing differences. If it does, our
model has a unique rationalizable outcome. Otherwise,
there exist parameter values for which multiple equilibria arise because players have a strong incentive to
invest at the same point in time others do.
4a. Corruption, Extortion, and the Boundaries of the
Law: The One-Monitor Case, (Joint with Svetlana Andrianova)
September 2006
4b.
Corruption, Extortion and the Boundaries of the
Law,
(Joint with Svetlana Andrianova), Journal of Law, Economics & Organization, 25 (2), October 2009, pp. 442-471
Abstract
In both papers we consider a set-up in which a principal must decide
whether or not to legalise a socially undesirable
activity. The law is enforced by a monitor who may be bribed to conceal
evidence of the offense and who may also engage in extortionary
practices. In the latter paper we analyse a
two-monitor set-up (the second monitor is honest and monitors the first one)
with bounded punishments. In the former paper we analyse
a one-monitor set-up with unbounded punishments and we also look at the case in
which the monitor needs the consent (and the active participation) of the agent
to create fake evidence of wrongdoing (this case is not present in our
two-monitor set-up). Our most interesting results are summarised
in the latter paper. In particular, we show that: (i)
the principal may legalise the activity even if it is
a very harmful one, (ii) the principal may declare the activity illegal knowing
that the monitor will abuse the law to extract bribes out of innocent people,
and (iii) our model offers a novel rationale for legalising
possession and consumption of drugs while continuing to prosecute drug
dealers. Our one-monitor set-up provides a
pedagogical explanation behind result (i).
5. Rational
Exuberance, (Joint with Paul Heidhues), European Economic Review, 56 (2012), pp. 1220 - 1240
Abstract
We study a two-player investment game with information externalities. Necessary
and sufficient conditions for a unique switching equilibrium are provided. When
public news indicates that the investment opportunity is very profitable, too
many types are investing early and investments should therefore be taxed.
Conversely, any positive investment tax is suboptimally
high if the public information is sufficiently unfavorable.
Work-in-Progress
1.
Bidding and Drilling on Offshore Wildcat Tracts, mimeo, January 2014
Abstract
A simple model is presented in which firms first
participate in an offshore oil and gas auction and next decide whether and when
to drill. If the discount factor is close to one, there essentially exists a
unique equilibrium in which a ``low" bid may signal an unwillingness to
drill early. This induces the other player to drill early. In turn, this
induces some types to strategically bid low. If players are sufficiently
patient, disclosing bids increases the quality of the drilling decision and it
also increases revenues. Disclosing bids, however, may reduce total drilling.
Last Updated:
March 2014