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on Economic Design |
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Issue of 2018‒07‒16
five papers chosen by Guillaume Haeringer, Baruch College and Alex Teytelboym, University of Oxford |
| By: | Andersson , Tommy (Department of Economics, Lund University); Ehlers , Lars (Département de sciences économiques, Université de Montréal); Svensson , Lars-Gunnar (Department of Economics, Lund University); Tierney , Ryan (Institute of Business and Economics, University of Southern Denmark) |
| Abstract: | We consider the taxation of exchanges among a set of agents where each agent owns one object. Agents may have different valuations for the objects and they need to pay taxes for exchanges. Using basic properties, we show that if pairwise (or some) exchanges of objects are allowed, then all exchanges (in any possible manner) must be feasible. Furthermore, whenever any agent exchanges his object, he pays the same fixed tax (a lump sum payment which is identical for all agents) independently of which object he consumes. Gale's top trading cycles algorithm finds the final allocation using the agents' valuations adjusted with the fixed tax. Our mechanisms are in stark contrast to Clarke-Groves taxation schemes or the max-med schemes proposed by Sprumont (2013). |
| Keywords: | Fixed Tax; Exchanges; Top Trading |
| JEL: | C71 C78 D63 D71 D78 |
| Date: | 2018–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2018_017&r=des |
| By: | Ingebretsen Carlson, Jim (Department of Economics, Lund University); Wu, Tingting (Department of Economics, Universitat Autònoma de Barcelona) |
| Abstract: | Second-price auctions with public information, such as those on eBay, provide an opportunity for sellers to use the information from finished and ongoing auctions when acting strategically in future auctions. Sellers have frequently been observed to bidding on their own item with the intent to artificially increase its price. This is known as shill bidding. Using lab experiments with two sequential auctions, we study the effect of shill bidding when the seller can choose to shill bid in the second auction. We also study the impact of different information revelation policies regarding the provision of the first auction bidding history to the seller. The experimental data confirm that shill bidding in the second auction affects outcomes in both auctions. Our findings are consistent with the predictions that the threat of shill bidding in the second auction does increase the bidders' final bid in the first auction. However, providing the seller with the bidding history from the first auction does not affect any important outcome variables. |
| Keywords: | Sequential auctions; shill bidding; experiment |
| JEL: | C92 D03 D44 |
| Date: | 2018–06–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2018_018&r=des |
| By: | Bergemann, Dirk; Castro, Francisco; Weintraub, Gabriel |
| Abstract: | We study the classic sequential screening problem in the presence of buyers' ex-post participation constraints. A leading example is the online display advertising market, in which publishers frequently do not use up-front fees and instead use transaction-contingent fees. We establish conditions under which the optimal selling mechanism is static and buyers are not screened with respect to their interim type, or sequential and the buyers are screened with respect to their interim type. In particular, we provide an intuitive necessary and sufficient condition under which the static contract is optimal for general distributions of ex-post values. Further, we completely characterize the optimal sequential contract with binary interim types and continuum of ex-post values when this condition fails. Importantly, the latter contract randomizes the allocation of the low type buyer while giving a deterministic allocation to the high type. We also provide partial results for the case of multiple interim types. |
| Keywords: | ex-post participation constraints; sequential contract.; Sequential Screening; static contract |
| JEL: | C72 D82 D83 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13018&r=des |
| By: | Stefano Galavotti (University of Padova); Luigi Moretti (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Paola Valbonesi (University of Padova) |
| Abstract: | We study bidding behavior by firms in beauty-contest auctions, i.e. auctions in which the winning bid is the one which gets closet to some function (average) of all submitted bids. Using a dataset on public procurement beauty-contest auctions, we show that firms' observed bidding behavior departs from equilibrium and can be predicted by a sophistication index, which captures the firms' accumulated capacity of bidding close to optimality in the past. We show that our empirical evidence is consistent with a Cognitive Hierarchy model of bidders' behavior. We also investigate whether and how firms learn to bid strategically through experience. |
| Keywords: | cognitive hierarchy,auctions,beauty-contest,public procurement |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01440891&r=des |
| By: | Daniela Bubboloni (Dipartimento di Matematica e Informatica “Ulisse Dini” Università degli Studi di Firenze, viale Morgagni, 67/a, 50134, Firenze, Italy); Mostapha Diss (Univ Lyon, UJM Saint-Etienne, GATE UMR 5824, F-42023 Saint-Etienne, France); Michele Gori (Dipartimento di Scienze per l’Economia e l’Impresa, Università degli Studi di Firenze, via delle Pandette 9, 50127, Firenze, Italy) |
| Abstract: | Committee selection rules are procedures selecting sets of candidates of a given size on the basis of the preferences of the voters. There are in the literature two natural extensions of the well-known single-winner Simpson voting rule to the multiwinner setting. The first method gives a ranking of candidates according to their minimum number of wins against the other candidates. Then, if a fixed number k of candidates are to be elected, the k best ranked candidates are chosen as the overall winners. The second method gives a ranking of committees according to the minimum number of wins of committee members against committee nonmembers. Accordingly, the committee of size k with the highest score is chosen as the winner. We propose an in-depth analysis of those committee selection rules, assessing and comparing them with respect to several desirable properties among which unanimity, fixed majority, non-imposition, stability, local stability, Condorcet consistency, some kinds of monotonicity, resolvability and consensus committee. We also investigate the probability that the two methods are resolute and suffer the reversal bias, the Condorcet loser paradox and the leaving member paradox. We compare the results obtained with the ones related to further well-known committee selection rules. The probability assumption on which our results are based is the widely used Impartial Anonymous Culture. |
| Keywords: | Multiwinner Elections, Committee Selection Rule, Simpson Voting Rule, Paradoxes, Probability |
| JEL: | D71 D72 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1813&r=des |