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on Economic Design |
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Issue of 2023‒04‒24
four papers chosen by Guillaume Haeringer, Baruch College and Alex Teytelboym, University of Oxford |
| By: | Kazuya Kikuchi; Yukio Koriyama |
| Abstract: | This paper studies a general class of social choice problems in which agents' payoff functions (or types) are privately observable random variables, and monetary transfers are not available. We consider cardinal social choice functions which may respond to agents' preference intensities as well as preference rankings. We show that a social choice function is ex ante Pareto efficient and Bayesian incentive compatible if and only if it is dictatorial. The result holds for arbitrary numbers of agents and alternatives, and under a fairly weak assumption on the joint distribution of types, which allows for arbitrary correlations and asymmetries. |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2303.05968&r=des |
| By: | Seungjin Han; Alex Sam; Youngki Shin |
| Abstract: | This paper studies a delegation problem faced by the planner who wants to regulate receivers' reaction choices in markets for matching between receivers and senders with signaling. We provide a noble insight into the planner's willingness to delegate and the design of optimal (reaction) interval delegation as a solution to the planner's general mechanism design problem. The relative heterogeneity of receiver types and the productivity of the sender' signal are crucial in deriving optimal interval delegation in the presence of the trade-off between matching efficiency and signaling costs. |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2303.09415&r=des |
| By: | Siyu Chen; Jibang Wu; Yifan Wu; Zhuoran Yang |
| Abstract: | We study the incentivized information acquisition problem, where a principal hires an agent to gather information on her behalf. Such a problem is modeled as a Stackelberg game between the principal and the agent, where the principal announces a scoring rule that specifies the payment, and then the agent then chooses an effort level that maximizes her own profit and reports the information. We study the online setting of such a problem from the principal's perspective, i.e., designing the optimal scoring rule by repeatedly interacting with the strategic agent. We design a provably sample efficient algorithm that tailors the UCB algorithm (Auer et al., 2002) to our model, which achieves a sublinear $T^{2/3}$-regret after $T$ iterations. Our algorithm features a delicate estimation procedure for the optimal profit of the principal, and a conservative correction scheme that ensures the desired agent's actions are incentivized. Furthermore, a key feature of our regret bound is that it is independent of the number of states of the environment. |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2303.08613&r=des |
| By: | Steven J. Brams; Mehmet S. Ismail; D. Marc Kilgour |
| Abstract: | Winning the coin toss at the end of a tied soccer game gives a team the right to choose whether to kick either first or second on all five rounds of penalty kicks, when each team is allowed one kick per round. There is considerable evidence that the right to make this choice, which is usually to kick first, gives a team a significant advantage. To make the outcome of a tied game fairer, we suggest a rule that handicaps the team that kicks first (A), requiring it to succeed on one more penalty kick than the team that kicks second (B). We call this the $m - n$ rule and, more specifically, propose $(m, n)$ = (5, 4): For A to win, it must successfully kick 5 goals before the end of the round in which B kicks its 4th; for B to win, it must succeed on 4 penalty kicks before A succeeds on 5. If both teams reach (5, 4) on the same round -- when they both kick successfully at (4, 3) -- then the game is decided by round-by-round "sudden death, " whereby the winner is the first team to score in a subsequent round when the other team does not. We show that this rule is fair in tending to equalize the ability of each team to win a tied game in a penalty shootout. We also discuss a related rule that precludes the teams from reaching (5, 4) at the same time, obviating the need for sudden death and extra rounds. |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2303.04807&r=des |