Konstantin von Beringe

arXiv2026

Robust Welfare under Imperfect Competition

We study welfare analysis for policy changes when supply and demand behavior are only partially known. We augment the robust approach pioneered by Kang and Vasserman (2025) by incorporating the supply side. We posit intervals of feasible pass-through and conduct (market-power) parameters, then apply them to two equilibrium snapshots to characterize the extremal supply-side terms entering welfare. We show that the supply-side bounds are attained by inverse pass-through functions that take only the two endpoint values of the specified interval, separated by a single price cutoff. Combining these supply-side extrema with demand-side shape restrictions, we produce simple bounds for consumer surplus, producer surplus, total surplus, and deadweight loss.

econ.TH↗

arXiv2024

The Perils of Overreaction

In order to study updating rules, we consider the problem of a malevolent principal screening an imperfectly Bayesian agent. We uncover a fundamental dichotomy between underreaction and overreaction to information. If an agent's posterior is farther away from the prior than it should be under Bayes' law, she can always be exploited by the principal to an unfettered degree: the agent's ex ante expected loss can be made arbitrarily large. In stark contrast, an agent who underreacts (whose posterior is closer to the prior than the Bayesian posterior) cannot be exploited at all.

econ.TH↗