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on Contract Theory and Applications |
| By: | Lin William Cong; Yizhou Xiao |
| Abstract: | Economic interactions, such as crowdfunding, often involve sequential actions, observational learning, and contingent project implementation. We incorporate all-or-nothing thresholds in a canonical model of information cascades. Early supporters effectively delegate their decisions to a "gatekeeper, " resulting in uni-directional cascades without herding on rejections. Project proposers consequently can charge higher prices. Proposal feasibility, project selection, and information aggregation all improve, even when agents can wait. Equilibrium outcomes depend on the crowd size, and project implementation and information aggregation achieve efficiency in the large-crowd limit. Our key insights remain robust under thresholds in dollar amounts, alternative equilibrium selection, among other model extensions. |
| JEL: | D81 D83 G12 G14 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30820&r=cta |
| By: | Benjamín Tello (CEMLA) |
| Abstract: | We study matching with couples problems where hospitals have one vacant position. We introduce a constraint on couples’ preferences over pairs of hospitals called restricted complementarity, which is a “translation” of bilateral substitutability in matching with contracts. Next, we extend Klaus and Klijn’s (2007) path to stability result by showing that if couples’ preferences satisfy restricted complementarity, then from any arbitrary matching, there exists a finite path of matchings where each matching on the path is obtained by “satisfying” a blocking coalition for the previous one and the final matching is stable. |
| Keywords: | Matching, Couples, Paths, Stability, Restricted Complementarity. |
| JEL: | C78 D47 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:cml:wpseri:02&r=cta |
| By: | Marina Núñez (Universitat de Barcelona and Barcelona Economic Analysis Team (BEAT)); Francisco Robles (ABC Economics) |
| Abstract: | We study the problem of allocating packages of different objects to a group of bidders. A rule is overbidding-proof if no bidder has incentives to bid above his actual valuations. We prove that if an efficient rule is overbidding-proof, then each winning bidder pays a price between his winning bid and what he would pay in a Vickrey auction for the same package. In counterpart, the set of rules that satisfy underbidding-proofness always charge a price below the corresponding Vickrey price. A new characterization of the Vickrey allocation rule is provided with a weak form of strategy-proofness. The Vickrey rule is the only rule that satisfies efficiency, individual rationality, overbidding-proofness and underbidding-proofness. Our results are also valid on the domains of monotonic valuations and of single-minded bidders. Finally, a rule is introduced that is overbidding proof and its payoffs are bidder-optimal in the core of the auction game according the reported valuations. |
| Keywords: | Strategy-proofness, overbidding, Vickrey allocation rule. |
| JEL: | D44 D47 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ewp:wpaper:440web&r=cta |
| By: | Stephan Leitner |
| Abstract: | In recent years, various decentralized organizational forms have emerged, posing a challenge for organizational design. Some design elements, such as task allocation, become emergent properties that cannot be fully controlled from the top down. The central question that arises in this context is: How can bottom-up task allocation be guided towards an effective organizational structure? To address this question, this paper presents a novel agent-based model of an organization that features bottom-up task allocation that can be motivated by either long-term or short-term orientation on the agents' side. The model also includes an incentive mechanism to guide the bottom-up task allocation process and create incentives that range from altruistic to individualistic. Our analysis shows that when bottom-up task allocation is driven by short-term orientation and aligned with the incentive mechanisms, it leads to improved organizational performance that surpasses that of traditionally designed organizations. Additionally, we find that the presence of altruistic incentive mechanisms within the organization reduces the importance of mirroring in task allocation. |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2301.00410&r=cta |