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on Economic Design |
| By: | Hao Chung; Tim Roughgarden; Elaine Shi |
| Abstract: | Users bid in a transaction fee mechanism (TFM) to get their transactions included and confirmed by a blockchain protocol. Roughgarden (EC'21) initiated the formal treatment of TFMs and proposed three requirements: user incentive compatibility (UIC), miner incentive compatibility (MIC), and a form of collusion-resilience called OCA-proofness. Ethereum's EIP-1559 mechanism satisfies all three properties simultaneously when there is no contention between transactions, but loses the UIC property when there are too many eligible transactions to fit in a single block. Chung and Shi (SODA'23) considered an alternative notion of collusion-resilience, called c-side-constract-proofness (c-SCP), and showed that, when there is contention between transactions, no TFM can satisfy UIC, MIC, and c-SCP for any c at least 1. OCA-proofness asserts that the users and a miner should not be able to "steal from the protocol" and is intuitively weaker than the c-SCP condition, which stipulates that a coalition of a miner and a subset of users should not be able to profit through strategic deviations (whether at the expense of the protocol or of the users outside the coalition). Our main result is the first proof that, when there is contention between transactions, no (possibly randomized) direct-revelation TFM satisfies UIC, MIC, and OCA-proofness. This result resolves the main open question in Roughgarden(EC'21). We also suggest several relaxations of the basic model that allow our impossibility result to be circumvented. |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2402.09321&r=des |
| By: | Milena Almagro (University of Chicago); Felipe Barbieri (University of Pennsylvania); Juan Camilo Castillo (University of Pennsylvania); Nathaniel Hickok (MIT); Tobias Salz (MIT) |
| Abstract: | We characterize optimal urban transportation policies in the presence of congestion and environmental externalities and evaluate their welfare and distributional effects. We present a framework of a municipal government that implements different transportation equilibria through its choice of public transit policies—prices and frequencies—as well as road pricing. The government faces a budget constraint that introduces monopoly-like distortions. We apply this framework to Chicago, for which we construct a new dataset that comprehensively captures transportation choices. We find that road pricing alone leads to large welfare gains by reducing externalities, but at the expense of consumers (travelers), whose surplus falls even if road pricing revenues are fully rebated. The largest losses are borne by middle income consumers, who are most reliant on cars. We find that the optimal price of public transit is close to zero and goes along with a reduction in the frequency of buses and an increase in the frequency of trains. Combining these transit policies with road pricing eliminates budget constraints. This allows the government to implement higher transit frequencies and even lower prices, in which case consumer surplus increases after rebates. |
| Keywords: | Urban transportation, public transit subsidy design, road pricing, spatial equilibrium, Ramsey pricing |
| JEL: | L91 L5 L13 H23 R41 R48 |
| Date: | 2024–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:24-004&r=des |
| By: | van Cranenburgh, Sander; Meyerhoff, Jürgen; Rehdanz, Katrin; Wunsch, Andrea |
| Abstract: | Efficient experimental designs aim to maximise the information obtained from stated choice data to estimate discrete choice models' parameters statistically efficiently. Almost without exception efficient experimental designs assume that decision-makers use a Random Utility Maximisation (RUM) decision rule. When using such designs, researchers (implicitly) assume that the decision rule used to generate the design has no impact on respondents' choice behaviour. This study investigates whether the decision rule assumption underlying an experimental design affects respondents' choice behaviour. We use four stated choice experiments on coastal adaptation to climate change: Two are based on experimental designs optimised for utility maximisation and two are based on experimental designs optimised for a mixture of RUM and Random Regret Minimisation (RRM). Generally, we find that respondents place value on adaptation measures (e.g., dykes and beach nourishments). We evaluate the models' fits and investigate whether some choice tasks particularly invoke RUM or RRM decision rules. For the latter, we develop a new sampling-based approach that avoids the confounding between preference and decision rule heterogeneity. We find no evidence that RUM-optimised designs invoke RUM-consistent choice behaviour. However, we find a relationship between some of the attributes and decision rules, and compelling evidence that some choice tasks invoke RUM consistent behaviour while others invoke RRM consistent behaviour. This implies that respondents’ choice behaviour and choice modelling outcomes are not exogenous to the choice tasks, which can be particularly critical when information on preferences is used to inform actual decision-making on a sensitive issue of common interest as climate change. |
| Keywords: | Coastal adaptation, Climate change, Experimental design theory, Decision rules, Random regret minimisation |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkie:281987&r=des |
| By: | Masaki Aoyagi; Maxime Menuet |
| Abstract: | This paper studies the optimal disclosure of information about an agent’s talent when it consists of two components. The agent observes the first component of his talent as his private type, and reports it to a principal to perform a task which reveals the second component of his talent. Based on the report and performance, the principal discloses information to a firm who pays the agent the wage equal to his expected talent. We study incentive compatible disclosure rules that minimize the mismatch between the agent’s true talent and his wage. The optimal rule entails full disclosure when the agent’s talent is a supermodular function of the two components, but entails partial pooling when it is submodular. Under a mild degree of submodularity, we show that the optimal disclosure rule is obtained as a solution to a linear programming problem, and identify the number of messages required under the optimal rule. We relate it to the agent’s incentive compatibility conditions, and show that each pooling message has binary support. |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1232&r=des |
| By: | Dang, Hai-Anh (World Bank); Kilic, Talip (World Bank); Hlasny, Vladimir (UN ESCWA); Abanokova, Kseniya (World Bank); Carletto, Calogero (World Bank) |
| Abstract: | Survey data on household consumption are often unavailable or incomparable over time in many low- and middle-income countries. Based on a unique randomized survey experiment implemented in Tanzania, this study offers new and rigorous evidence demonstrating that survey-to-survey imputation can fill consumption data gaps and provide low-cost and reliable poverty estimates. Basic imputation models featuring utility expenditures, together with a modest set of predictors on demographics, employment, household assets and housing, yield accurate predictions. Imputation accuracy is robust to varying survey questionnaire length; the choice of base surveys for estimating the imputation model; different poverty lines; and alternative (quarterly or monthly) CPI deflators. The proposed approach to imputation also performs better than multiple imputation and a range of machine learning techniques. In the case of a target survey with modified (e.g., shortened or aggregated) food or non-food consumption modules, imputation models including food or non-food consumption as predictors do well only if the distributions of the predictors are standardized vis-à-vis the base survey. For best-performing models to reach acceptable levels of accuracy, the minimum-required sample size should be 1, 000 for both base and target surveys. The discussion expands on the implications of the findings for the design of future surveys. |
| Keywords: | consumption, poverty, survey-to-survey imputation, household surveys, Tanzania |
| JEL: | C15 I32 O15 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16792&r=des |