nep-des New Economics Papers
on Economic Design
Issue of 2019‒07‒22
four papers chosen by
Alex Teytelboym
University of Oxford

  1. Learning Management Through Matching: A Field Experiment Using Mechanism Design By Girum Abebe; Marcel Fafchamps; Michael Koelle; Simon Quinn
  2. All Sequential Allotment Rules Are Obviously Strategy-proof By R. Pablo Arribillaga; Jordi Massó; Alejandro Neme
  3. The Condorcet Efficiency of the Preference Approval Voting and the Probability of Selecting the Condorcet Loser By Eric Kamwa
  4. Rent extraction with securities plus cash By Liu, Tingjun; Bernhardt, Dan

  1. By: Girum Abebe; Marcel Fafchamps; Michael Koelle; Simon Quinn
    Abstract: What is the effect of exposing motivated youth to firm management in practice? To answer this question, we place young professionals for one month in established firms to shadow middle managers. Using random assignment into program participation, we find positive average effects on wage employment, but no average effect on the likelihood of self-employment. Within the treatment group, we match individuals and firms in batches using a deferred-acceptance algorithm. We show how this allows us to identify heterogeneous treatment effects by firm and intern. We find striking heterogeneity in self-employment effects, but almost no heterogeneity in wage employment. Estimates of marginal treatment effects (MTE) are then used to simulate counterfactual mechanism design. We find that some assignment mechanisms substantially outperform random matching in generating employment and income effects. These results demonstrate the importance of treatment heterogeneity for the design of field experiments and the role of matching algorithms in intervention design.
    JEL: J24 O1 O15
    Date: 2019–07
  2. By: R. Pablo Arribillaga; Jordi Massó; Alejandro Neme
    Abstract: For the division problem with single-peaked preferences (Sprumont, 1991) we show that all sequential allotment rules, identified by Barberà, Jackson and Neme (1997) as the class of strategy-proof, efficient and replacement monotonic rules, are also obviously strategy-proof. Although obvious strategy-proofness is in general more restrictive than strategy-proofness, this is not the case in this setting.
    Keywords: Obvious Strategy-proofness; Sequential Allotment Rules; Division Problem; Single-peaked Preferences.
    JEL: D71
    Date: 2019–06–30
  3. By: Eric Kamwa (LC2S - Laboratoire caribéen de sciences sociales - CNRS - Centre National de la Recherche Scientifique - UA - Université des Antilles)
    Abstract: Under Approval Voting (AV), each voter just distinguishes the candidates he approves of from those appearing as unacceptable. The Preference Approval Voting (PAV) is a hybrid version of the approval voting first introduced by Brams and Sanver (2009). Under PAV, each voter ranks all the candidates and then indicates the ones he approves. In this paper, we provide analytical representations for the probability that PAV elects the Condorcet winner when she exists in three-candidate elections with large electorates. We also provide analytical representations for the probability that PAV elects the Condorcet loser. We perform our analysis by assuming the assumption of the Extended Impartial Culture. This analysis allows us to measure at which extend, PAV performs better than AV both on the propensity of electing the Condorcet loser and on that of the non-election of the Condorcet loser.
    Keywords: Probability,Condorcet,Extended Impartial Culture,Ranking,Approval Voting
    Date: 2019
  4. By: Liu, Tingjun (The University of Hong Kong); Bernhardt, Dan (University of Illinois & University of Warwick)
    Abstract: Auctions employing steeper securities generate greater revenues when bidders have equal opportunity costs. However, when opportunity costs rise sufficiently quickly with valuations, security bids decrease in NPV and steeper securities reduce seller revenues. We show that when such adverse selection obtains, using combinations of securities with differing steepness can generate higher revenues than using securities of the same steepness. We determine the optimal combination of cash plus equity; identify a novel way of implementing the optimal mechanism via decreasing royalty rates ; establish the robustness of the mechanism; and identify when auction designs combining cash with steeper-than-equity securities increase seller revenues.
    Date: 2019

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