|
on Economic Design |
|
Issue of 2023‒07‒10
seven papers chosen by Guillaume Haeringer, Baruch College and Alex Teytelboym, University of Oxford |
| By: | Ahmadzadeh, Amirreza; Kamali-Shahdadi, Behrang |
| Abstract: | We study a matching model in which firms face budget constraints. If the pro-duction function only depends on a firm’s technology, a weak stable matching always exists; furthermore, when a strong stable matching does not exist, there is a nearby budget vector for firms such that a strong stable matching exists for the problem with perturbed budgets. If the production function is multiplicative, one can reach a strong stable matching by changing the budget of firms such that the total budget remains the same and each firm’s budget change is bounded by the value of at most one worker for that firm. |
| Keywords: | Matching Theory; Market Design; Labor Market |
| JEL: | D47 C78 C71 |
| Date: | 2023–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:128153&r=des |
| By: | Yi-You Yang |
| Abstract: | We study firm-quasi-stability in the framework of many-to-many matching with contracts under substitutable preferences. We establish various links between firm-quasi-stability and stability and give new insights into the existence and lattice property of stable allocations. Moreover, we show that firm-quasi-stable allocations appears naturally when the stability of the market is disrupted by the entry of new firms or the retirement of some workers, and introduce a generalized deferred acceptance algorithm to show that the market can regain stability from firm-quasi-stable allocations by a decentralized process of offers and acceptances. |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2305.17948&r=des |
| By: | Dietzenbacher, Bas (RS: GSBE other - not theme-related research, QE Math. Economics & Game Theory); Tamura, Yuki |
| Abstract: | One unit of an infinitely divisible and non-disposable commodity has to be allocated among a group of agents with single-dipped preferences. We combine Pareto optimality with equal treatment of equals, the equal division lower bound, the equal division core, envy-freeness, and group envy-freeness. For each of these fairness requirements, we provide a necessary and sufficient condition for compatibility with Pareto optimality and we characterize all corresponding allocations for each preference profile. |
| JEL: | D63 D71 |
| Date: | 2023–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2023009&r=des |
| By: | Akaki Mamageishvili; Mahimna Kelkar; Jan Christoph Schlegel; Edward W. Felten |
| Abstract: | We design a practical algorithm for transaction ordering that takes into account both transaction timestamps and bids. The algorithm guarantees that users get their transactions published with bounded delay against a bid, while it extracts a fair value from sophisticated users that have an edge in latency, by moving expenditure from investment in latency improvement technology to bidding. The algorithm creates a score from timestamps and bids, and orders transactions based on the score. We first show that a scoring rule is the only type of rule that satisfies the independence of latency races. We provide an economic analysis of the protocol in an environment of private information, where investment in latency is made ex-ante or interim stages, while bidding happens at the interim stage where private signals have been observed. The algorithm is useful for transaction sequencing in rollups or in other environments where the sequencer has privileged access to order flows. |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2306.02179&r=des |
| By: | Amel Awadelkarim; Arjun Seshadri; Itai Ashlagi; Irene Lo; Johan Ugander |
| Abstract: | School choice mechanism designers use discrete choice models to understand and predict families' preferences. The most widely-used choice model, the multinomial logit (MNL), is linear in school and/or household attributes. While the model is simple and interpretable, it assumes the ranked preference lists arise from a choice process that is uniform throughout the ranking, from top to bottom. In this work, we introduce two strategies for rank-heterogeneous choice modeling tailored for school choice. First, we adapt a context-dependent random utility model (CDM), considering down-rank choices as occurring in the context of earlier up-rank choices. Second, we consider stratifying the choice modeling by rank, regularizing rank-adjacent models towards one another when appropriate. Using data on household preferences from the San Francisco Unified School District (SFUSD) across multiple years, we show that the contextual models considerably improve our out-of-sample evaluation metrics across all rank positions over the non-contextual models in the literature. Meanwhile, stratifying the model by rank can yield more accurate first-choice predictions while down-rank predictions are relatively unimproved. These models provide performance upgrades that school choice researchers can adopt to improve predictions and counterfactual analyses. |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2306.01801&r=des |
| By: | Ahmad Awde (FEMTO-ST - Franche-Comté Électronique Mécanique, Thermique et Optique - Sciences et Technologies (UMR 6174) - UTBM - Université de Technologie de Belfort-Montbeliard - ENSMM - Ecole Nationale Supérieure de Mécanique et des Microtechniques - CNRS - Centre National de la Recherche Scientifique - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE]); Mostapha Diss (CRESE - Centre de REcherches sur les Stratégies Economiques (UR 3190) - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE]); Eric Kamwa (LC2S - Laboratoire caribéen de sciences sociales - CNRS - Centre National de la Recherche Scientifique - UA - Université des Antilles); Julien Yves Rolland (LMB - Laboratoire de Mathématiques de Besançon (UMR 6623) - UB - Université de Bourgogne - CNRS - Centre National de la Recherche Scientifique - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE]); Abdelmonaim Tlidi (MAE2D - Laboratory MAE2D, University of Abdelmalek Essaadi) |
| Abstract: | A candidate is said to be socially acceptable if the number of voters who rank her among the most preferred half of the candidates is at least as large as the number of voters who rank her among the least preferred half (Mahajne and Volij, 2018). For every voting profile, there always exists at least one socially acceptable candidate. This candidate may not be elected by some well-known voting rules, which may even lead in some cases to the election of a socially unacceptable candidate, the latter being a candidate such that the number of voters who rank her among the most preferred half of the candidates is strictly less than the number of voters who rank her among the least preferred half. In this paper, our contribution is twofold. First, since the existence of a socially unacceptable candidate is not always guaranteed, we determine the probabilities of the existence of such a candidate. Then, we evaluate how often the Plurality rule, the Negative Plurality rule, the Borda rule and their two-round versions can elect a socially unacceptable candidate. We perform our calculations under both the Impartial Culture and the Impartial Anonymous Culture, |
| Keywords: | Voting, Social Unacceptability, Scoring Rules, Probability |
| Date: | 2023–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03614587&r=des |
| By: | Qianjun Lyu; Wing Suen; Yimeng Zhang |
| Abstract: | We study an information design problem with continuous state and discrete signal space. We find that the designer's interim value function affects the solution only through its curvature. There is a dual relation between the prior distribution and the marginal value function. Under convex value functions, the optimal information structure is interval-partitional. Moreover, in logconcave environments, a center of scrutiny emerges and information becomes coarser for states farther from it. We locate the scrutiny center and provide comparative statics on information structure with respect to prior distributions and value functions. The analysis can be extended to S-shaped value functions. |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2305.18020&r=des |