Economic Design
http://lists.repec.org/mailman/listinfo/nep-des
Economic Design
2021-04-05
Patent Auctions and Bidding Coalitions: Structuring the Sale of Club Goods
http://d.repec.org/n?u=RePEc:nbr:nberwo:28602&r=des
Auctioneers of patents are observed to allow joint bidding by coalitions of buyers. These auctions are distinguished by the good for sale being non-rivalrous, but still excludable, in consumption{that is, they auctions of club goods. This affects how coalitional bidding impacts auction performance. We study the implications of coalitions of bidders on second-price (or equivalently, ascending-price) auctions. Although the formation of coalitions can benefit the seller, we show that stable coalition profiles tend to consist of excessively large coalitions, to the detriment of both auction revenue and social welfare. Limiting the permitted coalition size increases efficiency and confers benefits on the seller. Lastly, we compare the revenues generated by patent auctions and multi-license auctions, and we find that the latter are superior in a large class of environments.
John Asker
Mariagiovanna Baccara
SangMok Lee
2021-03
On-Chain Auctions with Deposits
http://d.repec.org/n?u=RePEc:arx:papers:2103.16681&r=des
Second-price auctions with deposits are frequently used in blockchain environments. An auction takes place on-chain: bidders deposit an amount that fully covers their bid in a smart contract. The deposit is used as insurance against bidders not honoring their bid if they win. The deposit, but not the bid, is publicly observed during the bidding phase of the auction. The visibility of deposits can fundamentally change the strategic structure of the auction if bidding happens sequentially: Bidding is costly since the deposit has to be staked for a substantial amount of time. Thus, deposits can be used as a costly signal for a high valuation. This is the source of multiple inefficiencies: To engage in costly signaling, a bidder who bids first and has a high valuation will generally over-deposit in equilibrium, i.e. deposit more than he will bid. If high valuations are likely there can, moreover, be entry deterrence through high deposits: a bidder who bids first can deter subsequent bidders from entering the auction. Pooling can happen in equilibrium, where bidders of different valuations deposit the same amount. The auction fails to allocate the item to the bidder with the highest valuation.
Jan Christoph Schlegel
Akaki Mamageishvili
2021-03
The lattice of worker-quasi-stable matchings
http://d.repec.org/n?u=RePEc:arx:papers:2103.16330&r=des
In a many-to-one matching model in which firms' preferences satisfy substitutability, we study the set of worker-quasi-stable matchings. Worker-quasi-stability is a relaxation of stability that allows blocking pairs involving a firm and an unemployed worker. We show that this set has a lattice structure and define a Tarski operator on this lattice that models a re-equilibration process and has the set of stable matchings as its fixed points.
Agust\'in Bonifacio
Nadia Gui\~naz\'u
Noelia Juarez
Pablo Neme
Jorge Oviedo
2021-03
Online Market Equilibrium with Application to Fair Division
http://d.repec.org/n?u=RePEc:arx:papers:2103.12936&r=des
Computing market equilibria is a problem of both theoretical and applied interest. Much research focuses on the static case, but in many markets items arrive sequentially and stochastically. We focus on the case of online Fisher markets: individuals have linear, additive utility and items drawn from a distribution arrive one at a time in an online setting. We define the notion of an equilibrium in such a market and provide a dynamics which converges to these equilibria asymptotically. An important use-case of market equilibria is the problem of fair division. With this in mind, we show that our dynamics can also be used as an online item-allocation rule such that the time-averaged allocations and utilities converge to those of a corresponding static Fisher market. This implies that other good properties of market equilibrium-based fair division such as no envy, Pareto optimality, and the proportional share guarantee are also attained in the online setting. An attractive part of the proposed dynamics is that the market designer does not need to know the underlying distribution from which items are drawn. We show that these convergences happen at a rate of $O(\tfrac{\log t}{t})$ or $O(\tfrac{(\log t)^2}{t})$ in theory and quickly in real datasets.
Yuan Gao
Christian Kroer
Alex Peysakhovich
2021-03
Efficiency and Stability in a Process of Teams Formation
http://d.repec.org/n?u=RePEc:arx:papers:2103.13712&r=des
Motivated by data on coauthorships in scientific publications, we analyze a team formation process that generalizes matching models and network formation models, allowing for overlapping teams of heterogeneous size. We apply different notions of stability: myopic team-wise stability, which extends to our setup the concept of pair-wise stability, coalitional stability, where agents are perfectly rational and able to coordinate, and stochastic stability, where agents are myopic and errors occur with vanishing probability. We find that, in many cases, coalitional stability in no way refines myopic team-wise stability, while stochastically stable states are feasible states that maximize the overall number of activities performed by teams.
Leonardo Boncinelli
Alessio Muscillo
Paolo Pin
2021-03