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on Economic Design |
| By: | Edith Elkind; Ayumi Igarashi; Nicholas Teh |
| Abstract: | We study fair allocation of indivisible chores to agents under budget constraints, where each chore has an objective size and disutility. This model captures scenarios where a set of chores need to be divided among agents with limited time, and each chore has a specific time needed for completion. We propose a budget-constrained model for allocating indivisible chores, and systematically explore the differences between goods and chores in this setting. We establish the existence of an EFX allocation. We then show that EF2 allocations are polynomial-time computable in general; for many restricted settings, we strengthen this result to EF1. For divisible chores, we develop an efficient algorithm for computing an EF allocation. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2410.23979 |
| By: | Ryoto Ando; Kei Kimura; Taiki Todo; Makoto Yokoo |
| Abstract: | Diffusion mechanism design, which investigate how to incentivise agents to invite as many colleagues to a multi-agent decision making as possible, is a new research paradigm at the intersection between microeconomics and computer science. In this paper we extend traditional facility location games into the model of diffusion mechanism design. Our objective is to completely understand to what extent of anonymity/voter-relevance we can achieve, along with strategy-proofness and Pareto efficiency when voters strategically invite collegues. We define a series of anonymity properties applicable to the diffusion mechanism design model, as well as parameterized voter-relevance properties for guaranteeing reasonably-fair decision making. We obtained two impossibility theorems and two existence theorems, which partially answer the question we have raised in the beginning of the paper |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2411.05574 |
| By: | Herings, P.J.J. (Tilburg University, School of Economics and Management) |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:tiu:tiutis:2818f6ae-f3b0-4b5e-9222-a0a6fd48785b |
| By: | Xinnian Kazusa Pan |
| Abstract: | This paper establishes the equivalence between synchronous and asynchronous coordination mechanisms in dynamic games with strategic complementarities and common interests. Synchronous coordination, characterized by simultaneous commitments, and asynchronous coordination, defined by sequential action timing, are both prevalent in economic contexts such as crowdfunding and fund management. We introduce Monotone Subgame Perfect Nash Equilibrium, MSPNE, to analyze least favorable equilibrium outcomes. We provide a recursive characterization for synchronous coordination and a graph-theoretic representation for asynchronous coordination, demonstrating their equivalence in terms of the greatest implementable outcome. Our results show that the structure of commitment, whether simultaneous or sequential, does not affect the achievable welfare outcome under certain conditions. Additionally, we discuss computational aspects, highlighting the general NP-Hardness of the problem but identifying a significant class of games that are computationally tractable. These findings offer valuable insights for the optimal design of coordination mechanisms. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2411.01879 |
| By: | L\'aszl\'o Csat\'o |
| Abstract: | Swiss-system is an increasingly popular tournament format as it provides an attractive trade-off between the number of matches and ranking accuracy. However, few empirical research consider the optimal design of the Swiss-system. We contribute to this issue by investigating the fairness of Swiss-system chess competitions with an odd number of rounds, where half of the players have an extra game with white pieces. They are proven to enjoy a significant advantage and to be overrepresented among both the highest-ranked and outperforming players. Therefore, Swiss-system tournaments should have an even number of rounds and use a pairing mechanism that guarantees a balanced colour assignment. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2410.19333 |
| By: | Federico Echenique; Quitz\'e Valenzuela-Stookey |
| Abstract: | Harsanyi (1955) showed that the only way to aggregate individual preferences into a social preference which satisfies certain desirable properties is ``utilitarianism'', whereby the social utility function is a weighted average of individual utilities. This representation forms the basis for welfare analysis in most applied work. We argue, however, that welfare analysis based on Harsanyi's version of utilitarianism may overlook important distributional considerations. We therefore introduce a notion of utilitarianism for discrete-choice settings which applies to \textit{social choice functions}, which describe the actions of society, rather than social welfare functions which describe society's preferences (as in Harsanyi). We characterize a representation of utilitarian social choice, and show that it provides a foundation for a family of \textit{distributional welfare measures} based on quantiles of the distribution of individual welfare effects, rather than averages. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2411.01315 |
| By: | Guanyi Wang |
| Abstract: | Many policy problems involve designing individualized treatment allocation rules to maximize the equilibrium social welfare of interacting agents. Focusing on large-scale simultaneous decision games with strategic complementarities, we develop a method to estimate an optimal treatment allocation rule that is robust to the presence of multiple equilibria. Our approach remains agnostic about changes in the equilibrium selection mechanism under counterfactual policies, and we provide a closed-form expression for the boundary of the set-identified equilibrium outcomes. To address the incompleteness that arises when an equilibrium selection mechanism is not specified, we use the maximin welfare criterion to select a policy, and implement this policy using a greedy algorithm. We establish a performance guarantee for our method by deriving a welfare regret bound, which accounts for sampling uncertainty and the use of the greedy algorithm. We demonstrate our method with an application to the microfinance dataset of Banerjee et al. (2013). |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2410.20860 |
| By: | Hofstetter, Reto (U of Lucerne); Lanz, Andreas (U of Basel); Sahni, Navdeep S. (Stanford U) |
| Abstract: | In influencer marketing, the differing incentives of advertisers and influencers necessitate a delicate balance between control and creativity. Investigating this trade-off, we explore the impact of contractual constraints on advertiser outcomes, addressing the empirical challenges posed by the fact that contracts are rarely observed by researchers and are strategically offered by advertisers and selectively accepted by influencers. Our analysis uses a unique dataset comprising a thousand contracts offered by hundreds of brands to thousands of influencers to examine the prevalent advertiser-imposed constraints. We relate this data to information on influencer participation and follower responses, assessing how contractual constraints influence these outcomes. Our findings demonstrate that influencers are significantly averse to contractual constraints, which create a relational cost for them. Additionally, the audiences respond less favorably in terms of the advertiser’s outcomes to content produced under more restrictive conditions, implying a creativity suppression cost borne by the advertiser. A uniquely designed two-stage field experiment shows that the creativity suppression cost for advertisers outweighs the relational cost for influencers. Relaxing these constraints allows advertisers to triple their influencer retention rate within the same budget. We highlight the critical need for balancing managerial direction and influencer autonomy in designing influencer marketing campaigns. |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:ecl:stabus:4184 |
| By: | Hans Gersbach; Kremena Valkanova |
| Abstract: | This paper introduces Voting with Random Proposers (VRP) procedure to address the challenges of agenda manipulation in voting. In each round of VRP, a randomly selected proposer suggests an alternative that is voted on against the previous round's winner. In a framework with single-peaked preferences, we show that the VRP procedure guarantees that the Condorcet winner is implemented in a few rounds with truthful voting, and in just two rounds under sufficiently symmetric preference distributions or if status quo positions are not extreme. The results have applications for committee decisions, legislative decision-making, and the organization of citizens' assemblies and decentralized autonomous organizations. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2410.20476 |