The project provides insights into such issues as the internal organization of firms and the efficiency of large markets. The research emphasizes the role of incentives and uncertainty in decentralized economic organizations. The results show how the government can establish rules for bargaining with contractors that are in its best interest and what bargaining procedures for the transfer of items between divisions of the same firm promote the best interests of the organization as a whole. The study of bargaining is focused on the goal of comparing the efficiency of different bargaining procedures. These procedures are modelled as Bayesian games. The project emphasizes the equilibrium bidding strategies and welfare performance of k-double auctions, procedures used in the London gold market. Results obtained from the analysis of k-double auctions are used to derive general insights into the microstructure of an economy. A major goal of this project is to prove for a given bargaining model that a competitive market becomes efficient in the limit as the number of traders becomes large. Partnership is modelled as a game where each partner privately chooses his own contribution to the joint effort. This research examines the existence of rules for fully sharing the joint output that will induce each partner to choose to contribute the efficient amount of his input. It is shown that such rules may exist when the joint output is not completely determined by the partners' inputs. Sufficient conditions are derived for the existence of such rules.
