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on Economic Design |
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Issue of 2023‒02‒06
eight papers chosen by Guillaume Haeringer, Baruch College and Alex Teytelboym, University of Oxford |
| By: | Basteck, Christian; Ehlers, Lars H. |
| Abstract: | We study the random assignment of indivisible objects among a set of agents with strict preferences. We show that there exists no mechanism which is unanimous, strategy-proof and envy-free. Weakening the first requirement to q-unanimity - i.e., when every agent ranks a different object at the top, then each agent shall receive his most-preferred object with probability of at least q - we show that a mechanism satisfying strategy-proofness, envy-freeness and ex-post weak non-wastefulness can be q-unanimous only for q È 2/n (where n is the number of agents). To demonstrate that this bound is tight, we introduce a new mechanism, Random-Dictatorship-cum-Equal-Division (RDcED), and show that it achieves this maximal bound when all objects are acceptable. In addition, for three agents, RDcED is characterized by the first three properties and ex-post weak efficiency. If objects may be unacceptable, strategy-proofness and envy-freeness are jointly incompatible even with ex-post weak non-wastefulness. |
| Keywords: | random assignment, strategy-proofness, envy-freeness, q-unanimity |
| JEL: | D63 D70 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbmbh:spii2022208&r=des |
| By: | Benjamín Tello (CEMLA) |
| Abstract: | We study matching with couples problems where hospitals have one vacant position. We introduce a constraint on couples’ preferences over pairs of hospitals called restricted complementarity, which is a “translation” of bilateral substitutability in matching with contracts. Next, we extend Klaus and Klijn’s (2007) path to stability result by showing that if couples’ preferences satisfy restricted complementarity, then from any arbitrary matching, there exists a finite path of matchings where each matching on the path is obtained by “satisfying” a blocking coalition for the previous one and the final matching is stable. |
| Keywords: | Matching, Couples, Paths, Stability, Restricted Complementarity. |
| JEL: | C78 D47 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:cml:wpseri:02&r=des |
| By: | Hakimov, Rustamdjan; Schmacker, Renke; Terrier, Camille |
| Abstract: | This paper investigates the role self-confidence plays in college applications. Using incentivized experiments, we measure the self-confidence of more than 2, 000 students applying to colleges in France. This data reveals that the best female and low-SES students significantly underestimate their rank in the grade distribution compared to male and high-SES students. By matching our survey data with administrative data on real college applications and admissions, we show that miscalibrated confidence affects college choice on top of grades. We then estimate the impact of a randomized intervention that corrects students' under- and overconfidence by informing them of their real rank in the grade distribution. The treatment reduces the impact of under- and overconfidence for college applications, to the point where only grades but not miscalibrated confidence predict the application behavior of treated students. Providing feedback also makes the best students, who were initially underconfident, apply to more ambitious programs with stronger effects for female and low-SES students. |
| Keywords: | matching mechanism, confidence, information treatment, survey experiment |
| JEL: | I24 J24 D91 C90 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbmbh:spii2022209&r=des |
| By: | Ceesay, Muhammed |
| Abstract: | How much does it hurt seller revenue if some bidders know that others are colluding? Using a simple model of first and second price Independent Private Value auctions with uniformly distributed values where a single bidder knows privately of the existence of collusion by others, we show that this knowledge leads him to bid shading (weakly) in the first price auction compared to what he would have bid otherwise. This in turn yields the result that the second price auction dominates the first price auction in terms of seller revenue. This contrasts results from the literature showing that under our framework, when bidding is done while the presence of colluding bidders is common knowledge, the first price auction dominates the second price auction. |
| Keywords: | Almost-All-Inclusive Ring, Informational Structures |
| JEL: | D44 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:268306&r=des |
| By: | Marina Núñez (Universitat de Barcelona and Barcelona Economic Analysis Team (BEAT)); Francisco Robles (ABC Economics) |
| Abstract: | We study the problem of allocating packages of different objects to a group of bidders. A rule is overbidding-proof if no bidder has incentives to bid above his actual valuations. We prove that if an efficient rule is overbidding-proof, then each winning bidder pays a price between his winning bid and what he would pay in a Vickrey auction for the same package. In counterpart, the set of rules that satisfy underbidding-proofness always charge a price below the corresponding Vickrey price. A new characterization of the Vickrey allocation rule is provided with a weak form of strategy-proofness. The Vickrey rule is the only rule that satisfies efficiency, individual rationality, overbidding-proofness and underbidding-proofness. Our results are also valid on the domains of monotonic valuations and of single-minded bidders. Finally, a rule is introduced that is overbidding proof and its payoffs are bidder-optimal in the core of the auction game according the reported valuations. |
| Keywords: | Strategy-proofness, overbidding, Vickrey allocation rule. |
| JEL: | D44 D47 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ewp:wpaper:440web&r=des |
| By: | R Jain (Institute of Economics, Academia Sinica, Taipei, Taiwan); M Lombardi (University of Liverpool Management School) |
| Abstract: | We introduce a notion of rationalizable implementation for social choice functions, termed s-rationalizable implementation, and show that it is equivalent to robust implementation. |
| Keywords: | : Robust Implementation, Rationalizable Implementation, Social Choice Functions, Interim Best Response Property. |
| JEL: | C79 D82 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:sin:wpaper:21-a004&r=des |
| By: | R Jain (Institute of Economics, Academia Sinica, Taipei, Taiwan); V Korpela (Turku School of Economics, Finland); M Lombardi (University of Liverpool Management School) |
| Abstract: | We study rationalizable implementation of social choice functions. Iterative Monotonicity is both necessary and sufficient for implementation when there are two or more players. |
| Keywords: | : Implementation, monotonicity, Tarski’s fixed point theorem, rationalizability. |
| JEL: | C79 D82 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:sin:wpaper:21-a001&r=des |
| By: | Salvador Barberà; Walter Bossert |
| Abstract: | The conditions of strong Condorcet winner consistency and strong Condorcet loser consistency are, in essence, universally accepted. However, there are many situations in which they are silent. The weak counterparts of these properties suffer from the fatal flaw that a weak Condorcet winner can be a weak Condorcet loser at the same time. We propose a new notion of Condorcet-type winners and losers that is intermediate in strength between these two extremes. A feasible candidate is an intermediate Condorcet winner if this candidate wins against or ties with each other feasible candidate in a pairwise contest, with at least one instance of a win. Likewise, a feasible candidate is an intermediate Condorcet loser if the candidate loses against or ties with each other feasible candidate, with at least one instance of a loss. Our intermediate variants of Condorcet winner consistency and Condorcet loser consistency share the intuitive appeal of strong Condorcet winner consistency and strong Condorcet loser consistency, and they do not lead to the counterintuitive conclusions of the consistency conditions defined in terms of weak Condorcet winners and losers. We provide a thorough examination of the properties of our proposal and compare it to earlier attempts to modify the traditional Condorcet conditions. Journal of Economic Literature Classification Nos.: D71, D72, D63. Keywords. Social choice; Voting; Condorcet consistency; Single-peakedness. |
| Keywords: | Social Choice, voting, Condorcet consistency, single-peakedness |
| JEL: | D71 D72 D63 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1380&r=des |