|
on Economic Design |
| By: | Shengwu Li |
| Abstract: | Which mechanisms are simple to play? When is it easy for participants to see that a mechanism is incentive-compatible? I will start by explaining how and why economists came to ask these questions. Then I will discuss three recent answers, that capture different aspects of what makes a mechanism simple. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2403.18694&r=des |
| By: | Ashkenazi-Golan, Galit; Tsodikovich, Yevgeny; Viossat, Yannick |
| Abstract: | A common practice in many auctions is to offer bidders an opportunity to improve their bids, known as a best and final offer stage. This improved bid can depend on new information either about the asset or about the competitors. This paper examines the effects of new information regarding competitors, seeking to determine what information the auctioneer should provide assuming the set of allowable bids is discrete. The rational strategy profile that maximizes the revenue of the auctioneer is the one where each bidder makes the highest possible bid that is lower than his valuation of the item. This strategy profile is an equilibrium for a large enough number of bidders, regardless of the information released. We compare the number of bidders needed for this profile to be an equilibrium under different information structures. We find that it becomes an equilibrium with fewer bidders when less additional information is made available to the bidders regarding the competition. It follows that when the number of bidders is a priori unknown, there are some advantages to the auctioneer not revealing information and conducting a one-stage auction instead. |
| Keywords: | auctions; BAFO; information utilization; multistage auctions; NSFC-ISF; China Grant #2510/17. Y |
| JEL: | D44 D82 |
| Date: | 2023–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:118706&r=des |
| By: | Christian Basteck (WZB Berlin) |
| Abstract: | We study the problem of assigning indivisible objects to agents where each is to receive one object. To ensure fairness in the absence of monetary compensation, we consider random assignments. Random Priority, also known as Random Serial Dictatorship, is characterized by symmetry, ex-post efficiency and probabilistic (Maskin) monotonicity -- whenever preferences change so that a given deterministic assignment is ranked weakly higher by all agents, the probability of that assignment being chosen should be weakly larger. Probabilistic monotonicity implies strategy-proofness for random assignment problems and is equivalent on a general social choice domain; for deterministic rules it coincides with Maskin monotonicity. |
| Keywords: | random assignment; random priority; random serial dictatorship; ex-post efficiency ; probabilistic monotonicity; maskin monotonity ; |
| JEL: | C70 C78 D63 |
| Date: | 2024–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:502&r=des |
| By: | Masahiro KAWASAKI; Ryosuke SAKAI; Tomoya KAZUMURA |
| Abstract: | We study consistency in multi-unit object allocation problems with money. Objects are identical and each agent has a multi-demand and quasi-linear preferences. We consider the class of weak object monotonic preferences and that of single-peaked preferences. We first show that on those domains, if a rule satisfies consistency, strategyproofness, individual rationality, no subsidy, non-wasteful tie-breaking, and minimal tradability, then it is a sequential dictatorship rule. Since not all sequential dictatorship rule are strategy-proof and consistent, we then focus on a specific class of sequential dictatorship rules which we call sequential dictatorship rules with lowest tie-breaking. On the weakly object monotonic domain, when the reservation prices are increasing in the number of objects, sequential dictatorship rules with lowest tie-breaking satisfy consistency and independence of unallocated objects if and only if there is a common priority ordering for more than one object and this is an acyclic ordering of the priority ordering for one object. We also show that this condition is a necessary and sufficient condition for a sequential dictatorship rule with lowest tie-breaking to satisfy consistency and independence of unallocated objects on the single-peaked domain. Keywords. Consistency, Strategy-proofness, sequential dictatorship rule, serial dictatorship rule, weakly object monotonic preferences, single-peaked preferences, acyclicity. |
| Keywords: | Consistency, Strategy-proofness, sequential dictatorship rule, serial dictatorship rule, weakly object monotonic preferences, single-peaked preferences, acyclicity. |
| JEL: | D44 D71 D61 D82 |
| URL: | http://d.repec.org/n?u=RePEc:kue:epaper:e-23-007-v2&r=des |