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on Economic Design |
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Issue of 2022‒11‒07
seven papers chosen by Guillaume Haeringer, Baruch College and Alex Teytelboym, University of Oxford |
| By: | Paola B. Manasero; Jorge Oviedo |
| Abstract: | In a many-to-many matching model in which agents' preferences satisfy substitutability and the law of aggregate demand, we proof the General Manipulability Theorem. We result generalizes the presented in Sotomayor (1996 and 2012) for the many-to-one model. In addition, we show General Manipulability Theorem fail when agents' preferences satisfy only substitutability. |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2210.06549&r= |
| By: | Yannai A. Gonczarowski; Ori Heffetz; Clayton Thomas |
| Abstract: | A menu description defines a mechanism to player $i$ in two steps. Step (1) uses the reports of other players to describe $i$'s menu: the set of $i$'s potential outcomes. Step (2) uses $i$'s report to select $i$'s favorite outcome from her menu. Can menu descriptions better expose strategyproofness, without sacrificing simplicity? We propose a new, simple menu description of Deferred Acceptance. We prove that -- in contrast with other common matching mechanisms -- this menu description must differ substantially from the corresponding traditional description. We demonstrate, with a lab experiment on two simple mechanisms, the promise and challenges of menu descriptions. |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2209.13148&r= |
| By: | R. Pablo Arribillaga; Agustin G. Bonifacio |
| Abstract: | In a voting problem with a finite set of alternatives to choose from, we study the manipulation of tops-only rules. Since all non-dictatorial (onto) voting rules are manipulable when there are more than two alternatives and all preferences are allowed, we look for rules in which manipulations are not obvious. First, we show that a rule does not have obvious manipulations if and only if when an agent vetoes an alternative it can do so with any preference that does not have such alternative in the top. Second, we focus on two classes of tops-only rules: (i) (generalized) median voter schemes, and (ii) voting by committees. For each class, we identify which rules do not have obvious manipulations on the universal domain of preferences. |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2210.11627&r= |
| By: | Stefano Vannucci |
| Abstract: | This paper provides a general framework to explore the possibility of agenda manipulation-proof and proper consensus-based preference aggregation rules, so powerfully called in doubt by a disputable if widely shared understanding of Arrow's `general possibility theorem'. We consider two alternative versions of agenda manipulation-proofness for social welfare functions, that are distinguished by `parallel' vs. `sequential' execution of agenda formation and preference elicitation, respectively. Under the `parallel' version, it is shown that a large class of anonymous and idempotent social welfare functions that satisfy both agenda manipulation-proofness and strategy-proofness on a natural domain of single-peaked `meta-preferences' induced by arbitrary total preference preorders are indeed available. It is only under the second, `sequential' version that agenda manipulation-proofness on the same natural domain of single-peaked `meta-preferences' is in fact shown to be tightly related to the classic Arrowian `independence of irrelevant alternatives' (IIA) for social welfare functions. In particular, it is shown that using IIA to secure such `sequential' version of agenda manipulation-proofness and combining it with a very minimal requirement of distributed responsiveness results in a characterization of the `global stalemate' social welfare function, the constant function which invariably selects universal social indifference. It is also argued that, altogether, the foregoing results provide new significant insights concerning the actual content and the constructive implications of Arrow's `general possibility theorem' from a mechanism-design perspective. |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2210.03200&r= |
| By: | Jason Allen (Bank of Canada); Jakub Kastl (Princeton University); Milena Wittwer (Boston College) |
| Abstract: | We analyze ways to reduce funding costs when issuing government debt, without changing the level of debt. Leveraging an institutional feature that auctions of different Treasury securities are held simultaneously, we propose and implement a method for estimating own-and cross-security demand elasticities, avoiding the usual endogeneity issues in demand estimation. We show that these elasticities, together with the auction format, determine how to optimally allocate debt across securities. Starting from an equal supply split between two securities, a government can save money by issuing less of the price-sensitive and more of the price-insensitive security in a discriminatory price auction, and vice versa in a uniform price auction. |
| Keywords: | Multi-unit auctions, structural estimation, market segmentation, government bonds, demand elasticities |
| JEL: | D44 C14 E58 G12 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2022-12&r= |
| By: | Yao Luo; Peijun Sang; Ruli Xiao |
| Abstract: | We establish nonparametric identification of auction models with continuous and nonseparable unobserved heterogeneity using three consecutive order statistics of bids. We then propose sieve maximum likelihood estimators for the joint distribution of unobserved heterogeneity and the private value, as well as their conditional and marginal distributions. Lastly, we apply our methodology to a novel dataset from judicial auctions in China. Our estimates suggest substantial gains from accounting for unobserved heterogeneity when setting reserve prices. We propose a simple scheme that achieves nearly optimal revenue by using the appraisal value as the reserve price. |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2210.03547&r= |
| By: | Frédéric Koessler (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); Marie Laclau (HEC Paris - Ecole des Hautes Etudes Commerciales, GREGHEC - Groupement de Recherche et d'Etudes en Gestion - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique); Jérôme Renault (TSE-R - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Tristan Tomala (GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique, HEC Paris - Ecole des Hautes Etudes Commerciales) |
| Abstract: | We analyze information design games between two designers with opposite preferences and a single agent. Before the agent makes a decision, designers repeatedly disclose public information about persistent state parameters. Disclosure continues until no designer wishes to reveal further information. We consider environments with general constraints on feasible information disclosure policies. Our main results characterize equilibrium payoffs and strategies of this long information design game and compare them with the equilibrium outcomes of games where designers move only at a single predetermined period. When information disclosure policies are unconstrained, we show that at equilibrium in the long game, information is revealed right away in a single period; otherwise, the number of periods in which information is disclosed might be unbounded. As an application, we study a competition in product demonstration and show that more information is revealed if each designer could disclose information at a predetermined period. The format that provides the buyer with most information is the sequential game where the last mover is the ex-ante favorite seller. |
| Keywords: | Bayesian persuasion,Concavification,Convexification,Information design,Mertens Zamir solution,Product demonstration,Splitting games,Statistical experiments,Stochastic games |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-02400053&r= |