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on Economic Design |
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Issue of 2018‒07‒30
six papers chosen by Guillaume Haeringer, Baruch College and Alex Teytelboym, University of Oxford |
| By: | Antonio Romero-Medina; Matteo Triossi |
| Abstract: | We study strategy-profness in many-to many matching markets. We prove that when firms have acyclical preferences over workers and both firms and workers have responsive preferences, the worker-optimal stable mechanism is group strategy-proof and Pareto optimal. Absent any assumption on workers’ references, an Adjusted Serial Dictatorship among workers is stable, group strategy-proof and Pareto optimal for workers. In both cases, the set of stable matchings is a singleton. We show that acyclicity is the minimal condition guaranteeing the existence of stable and strategy-proof mechanisms in many-to-many matching markets. Economic Literature Classification Numbers: C71, C78, D71, D78. Key words: Keywords: Many-to-many markets, Acyclicity, Stability, Group Strategy-proofness, singleton core. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:edj:ceauch:332&r=des |
| By: | Benny Moldovanu; Deniz Dizdar; Nora Szech |
| Abstract: | Agents in a finite two-sided market are matched assortatively, based on costly investments. Besides signaling private, complementary types, investments generate direct benefits for partners. We explore quantitative properties of the equilibrium investment behavior. The bilateral external benefits induce an investment multiplier effect. This multiplier effect depends in a complex way on agents’ uncertainty about their own rank and about the types and investments of potential partners. We characterize how the multiplier effect hinges on market size, and how it interacts with other important factors such as the costs of investment and the signaling incentives induced by competition. |
| Keywords: | two-sided matching, signaling, investment, multiplier effect |
| JEL: | C78 D44 D82 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_030_2018&r=des |
| By: | Benny Moldovanu; Alex Gershkov; Philipp Strack |
| Abstract: | We study the revenue maximizing allocation of m units among n symmetric agents that have unit demand and convex preferences over the probability of receiving an object. Such preferences are naturally induced by a game where the agents take costly actions that affect their values before participating in the mechanism. Both the uniform m + 1 price auction and the discriminatory pay-your-bid auction with reserve prices constitute symmetric revenue maximizing mechanisms. Contrasting the case with linear preferences, the optimal reserve price reacts to both demand and supply, i.e., it depends both on the number of objects m and on number of agents n. The main tool in our analysis is an integral inequality involving majorization, super-modularity and convexity due to Fan and Lorentz (1954). |
| Keywords: | revenue maximization, endogenous values , investments, majorization |
| JEL: | D44 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_031_2018&r=des |
| By: | Daniela Bubboloni (Università degli Studi di Firenze [Firenze]); Mostapha Diss (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Michele Gori (Università degli Studi di Firenze [Firenze]) |
| 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 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01827668&r=des |
| By: | Pablo Amorós (Department of Economics, University of Málaga) |
| Abstract: | A group of experts must choose the winner of a competition. The honest opinions of the experts must be aggregated to determine the deserving winner. The aggregation rule is majoritarian if it respects the honest opinion of the majority of experts. An expert might not want to reveal her honest opinion if, by doing so, a contestant that she likes more is chosen. Then, we have to design a mechanism that implements the aggregation rule. We show that, in general, no majoritarian aggregation rule is Nash implementable, even if no expert has friends or enemies among the contestants. |
| Keywords: | mechanism design; Nash equilibrium; aggregation of experts' opinions; jury |
| JEL: | C72 D71 D78 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:mal:wpaper:2018-5&r=des |
| By: | Benny Moldovanu; Alex Gershkov; Xianwen Shi |
| Abstract: | We study a multi-dimensional collective decision under incomplete information. Agents have Euclidean preferences and vote by simple majority on each issue (dimension), yielding the coordinate-wise median. Judicious rotations of the orthogonal axes - the issues that are voted upon - lead to welfare improvements. If the agents' types are drawn from a distribution with independent marginals then, under weak conditions, voting on the original issues is not optimal. If, in addition, the marginals are identical, then voting first on the total sum and next on the differences is often welfare superior to voting on the original issues. We also provide various lower bounds on incentive efficiency: in particular, if agents' types are drawn from a log-concave density with symmetric marginals, a second-best voting mechanism attains at least 88% of the first-best efficiency. |
| Keywords: | multi-dimensional voting , welfare , bundling |
| JEL: | D82 D71 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_029_2018&r=des |