arXiv subjects

Andrew B. Choi

Publications and source records attributed to Andrew B. Choi.

2 recordsLinked to original sources

arXiv2026

Providing Certainty

We introduce a moral hazard model in which public information about a payoff-relevant state arrives over time, an agent decides when to make an irreversible investment, and a principal commits to a state-contingent policy to incentivize investment. To discourage the agent from waiting for more information, the principal's optimal policy provides certainty, reducing the degree to which the agent's payoff depends on the state. This is inefficient -- both players would be better off with less certainty. We study when the agent receives positive rent, and when moral hazard delays investment. Our results apply to environmental subsidies and R&D incentives.

econ.TH↗

arXiv2026

Optimal Auction Design for Dynamic Stochastic Environments: Myerson Meets Naor

Motivated by applications such as cloud computing, gig platforms, and blockchain auctions, we study optimal selling mechanisms for dynamic markets with stochastic supply and demand. In our model, buyers with private valuations and homogeneous goods arrive stochastically and can be held in queues at a cost. The optimal mechanism pairs allocative efficiency with dynamic admission control: goods are assigned to the highest-value buyer, while entry is restricted by value thresholds that strictly increase with the queue length and decrease with available inventory. This policy smooths competitive pressure across time and is implemented in dominant strategies via auctions with dynamic reserve prices.

econ.TH↗