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on Economic Design |
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Issue of 2022‒08‒29
five papers chosen by Guillaume Haeringer, Baruch College and Alex Teytelboym, University of Oxford |
| By: | Peter Troyan |
| Abstract: | In assignment problems, the average rank of the objects received is often used as key measure of the quality of the resulting match. The rank-minimizing (RM) mechanism optimizes directly for this objective, by returning an assignment that minimizes the average rank. While a naturally appealing mechanism for practical market design, one shortcoming is that this mechanism fails to be strategyproof. In this paper, I show that, while the RM mechanism is manipulable, it is not obviously manipulable. |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2206.11359&r= |
| By: | Zaifu Yang; Jingsheng Yu |
| Abstract: | This paper proposes an ascending auction for selling multiple heterogeneous indivisible items to several potential bidders. Every bidder demands at most one item and faces a budget constraint. His valuations and budget are private information. Budget constraints may lead to the failure of competitive equilibrium. Bidders are not assumed to behave as price-takers and may therefore act strategically. We prove that the auction always induces bidders to bid truthfully and finds a strongly Pareto efficient core allocation when bidders are budget constrained, otherwise a Walrasian equilibrium with the minimum equilibrium price vector. |
| Keywords: | Ascending auction, core, equilibrium, budget constraint, incentive, assignment market. |
| JEL: | D44 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:22/02&r= |
| By: | Philippe Jehiel (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, UCL - University College of London [London]); Konrad Mierendorff (UCL - University College of London [London]) |
| Abstract: | We study the existence of e¢cient auctions in private value settings in which some bidders choose their bids based on the accessible data from past similar auctions consisting of bids and ex post values. We consider steady-states in such environments with a mix of rational and data-driven bidders, and we allow for correlation across bidders in the signal distributions about the ex post values. After reviewing the working of the approach in second-price and first-price auctions, we show our main result that there is no e¢cient auction in such environments. |
| Keywords: | Belief Formation,Auctions,E¢ciency,Analogy-based Expectations Belief Formation |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03735747&r= |
| By: | Xu Lang; Debasis Mishra |
| Abstract: | We study a model of voting with two alternatives in a symmetric environment. We characterize the interim allocation probabilities that can be implemented by a symmetric voting rule. We show that every such interim allocation probabilities can be implemented as a convex combination of two families of deterministic voting rules: qualified majority and qualified anti-majority. We also provide analogous results by requiring implementation by a unanimous voting rule. A consequence of our results is that if the prior is independent, every symmetric and ordinally Bayesian incentive compatible voting rule is reduced (interim) form equivalent to a symmetric and strategy-proof voting rule. |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2207.09253&r= |
| By: | Morimitsu Kurino (Faculty of Economics, Keio University); Tetsutaro Hatakeyama (Graduate School of Economics, Keio University) |
| Abstract: | Priorities over agents are crucial primitives in assignment problems of indivisible objects without monetary transfers. In this paper, we introduce a prioritization problem; there are several exogenous attributes and each agent is equipped with one such attribute, and the priority is initially determined only for agents with the same attribute. This leads to a partial priority order. Our problem is to construct a complete priority, which is needed to implement a known mechanism such as the serial dictatorship. We propose a simple prioritization rule called the relative position rule. We formulate three equity axioms and an invariance property; the priority preservation law, the equal treatment of equal positions, the equal split, and the attribute-wise consistency. We show that the relative position rule is characterized by these equity axioms. The result is applicable to general assignment problems with partial priorities. In the context of college students' exchange programs, the rule levels the playing field in the sense that inequality across attributes is partially reduced. |
| Keywords: | Priority-based assignmen;Market design;Equity in attributes;The relative position rule |
| JEL: | C78 D47 D78 |
| Date: | 2022–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:keo:dpaper:2022-009&r= |