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on Economic Design |
| By: | Michael Ostrovsky; Michael Schwarz |
| Abstract: | Building on the canonical "bottleneck" model of Vickrey (1969), we show that carpooling and road pricing are highly complementary in addressing traffic congestion: they can be much more effective jointly than each one separately, and can improve commuter welfare without having to rely on the redistribution of government revenue. By contrast, technological advances that make time in traffic more comfortable or productive (e.g., self-driving cars), implemented without additional economic incentives, may result in zero improvement in social welfare. |
| JEL: | D47 D62 H23 L98 Q58 R41 R48 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34261 |
| By: | Frank Yang (Harvard University); Kai Hao Yang (Yale University) |
| Abstract: | We characterize the extreme points of multidimensional monotone functions from $[0, 1]^n$ to $[0, 1]$, as well as the extreme points of the set of one-dimensional marginals of these functions. These characterizations lead to new results for various mechanism design and information design problems, including public good provision with interdependent values; interim efficient bilateral trade mechanisms; mechanism (anti) equivalence; asymmetric reduced form auctions; and optimal private private information structure. |
| Date: | 2025–08–28 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2428r1 |
| By: | Pablo Arribillaga (UNSL/CONICET); Jordi Massó (Universitat Autonoma de Barcelona/Barcelona School of Economics); Alejandro Neme (UNSL/CONICET) |
| Abstract: | We introduce the concept of group obvious strategy-proofness, an extension of Li (2017)’s notion of obvious strategy-proofness, by requiring that truth-tellingremains an obviously dominant strategy for any group of agents in the extensive game form implementing the social choice function. We show that this stronger condition isno more restrictive: the set of all group obviously strategy-proof social choice functions coincides with the set of all obviously strategy-proof social choice functions. Building on this equivalence result and existing results on obvious strategy-proofness, we derive further equivalence results concerning the implementability of social choice functions via round-table mechanisms: strategy-proofness, group strategy-proofness, obvious strategy-proofness, and group obvious strategy-proofness are all equivalent. |
| Keywords: | Group strategy-proofness; Obvious strategy-proofness. |
| JEL: | D71 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:aoz:wpaper:372 |
| By: | Tom‡s Larroucau (Arizona State University); Ignacio A. Rios (The University of Texas at Dallas); Ana•s Fabre (Institute for Fiscal Studies); Christopher Neilson (Yale University) |
| Abstract: | We examine whether large-scale information interventions can improve college application outcomes in a centralized admissions system. Using nationwide surveys from Chile, we document widespread information frictions and frequent application mistakes, such as omitting attainable preferred programs or failing to include safety options. To address these frictions, we partnered with the Ministry of Education to implement a large-scale field experiment that provided applicants with personalized information on admission probabilities and program characteristics through customized online platforms. The intervention increased the probability that previously unmatched students received an assignment by 44% and improved placement into higher-ranked programs by 20%. Building on these results, the policy was scaled nationwide, reaching all applicants. The scaled-up version, evaluated via an encouragement design, confirmed substantial gains, including higher admission rates for initially unmatched students and persistent enrollment improvements. Our findings show that low-cost, personalized information policies, when integrated into centralized admissions platforms, can substantially reduce application mistakes and improve student outcomes at scale. The results also highlight how leveraging existing market design infrastructure can enable scalable, cost-effective interventions that enhance efficiency and equity in higher education access. |
| Date: | 2025–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2461 |
| By: | Chao Huang |
| Abstract: | This paper studies a matching problem in which a group of agents cooperate with agents on two sides. In environments with either nontransferable or transferable utilities, we demonstrate that a stable outcome exists when cooperations exhibit same-side complementarity and cross-side substitutability. Our results apply to pick-side matching problems and membership competition in online duopoly markets. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.10942 |
| By: | Josue Ortega |
| Abstract: | We analyze the performance of the Boston mechanism under equilibrium play in uniform random markets. We provide two results. First, while the share of students assigned to their first preference is 63% under truthfulness, this fraction becomes vanishingly small in any Nash equilibrium of the preference revelation game induced by the Boston mechanism. Second, we show that there is a Nash equilibrium of the corresponding preference revelation game where the average student is assigned to a highly undesirable school-dramatically worse ranked than the logarithmic rank achieved under truthfulness. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2506.19450 |
| By: | Hai Yang; Joseph Y. J. Chow |
| Abstract: | Urban mobility is undergoing rapid transformation with the emergence of new services. Mobility hubs (MHs) have been proposed as physical-digital convergence points, offering a range of public and private mobility options in close proximity. By supporting Mobility-as-a-Service, these hubs can serve as focal points where travel decisions intersect with operator strategies. We develop a bilevel MH platform design model that treats MHs as control levers. The upper level (platform) maximizes revenue or flow by setting subsidies to incentivize last-mile operators; the lower level captures joint traveler-operator decisions with a link-based Perturbed Utility Route Choice (PURC) assignment, yielding a strictly convex quadratic program. We reformulate the bilevel problem to a single-level program via the KKT conditions of the lower level and solve it with a gap-penalty method and an iterative warm-start scheme that exploits the computationally cheap lower-level problem. Numerical experiments on a toy network and a Long Island Rail Road (LIRR) case (244 nodes, 469 links, 78 ODs) show that the method attains sub-1% optimality gaps in minutes. In the base LIRR case, the model allows policymakers to quantify the social surplus value of a MH, or the value of enabling subsidy or regulating the microtransit operator's pricing. Comparing link-based subsidies to hub-based subsidies, the latter is computationally more expensive but offers an easier mechanism for comparison and control. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.10465 |
| By: | Federico Innocenti; Lucia Schiavon |
| Abstract: | We investigate theoretically the introduction of a market for commercial surrogacy for social motives. Agents have heterogeneous incomes and preferences for parenthood, and face pregnancy-related income reductions. In equilibrium, low-income agents provide surrogacy for high-income agents who seek “insurance†against income loss and would not become parents without surrogacy. Surrogacy has an ambiguous effect on fertility: it increases fertility only if the latter is low without surrogacy. Otherwise, its impact on fertility is negative. |
| Keywords: | Surrogacy, Fertility, Welfare, Labour Market. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cca:wchild:126 |
| By: | Sylvain Béal (Université Marie et Louis Pasteur, CRESE UR3190, F-25000 Besançon, France); Léa Munich (Université Paris Panthéon Assas, CRED UR 7321, F-75005 Paris, France); Philippe Solal (Université Paris Panthéon Assas, GATE Lyon Saint-Etienne, UMR 5824, F-42023 Saint-Etienne, France); Kevin Techer (Université Marie et Louis Pasteur, CRESE UR3190, F-25000 Besançon, France) |
| Abstract: | We consider cooperative TU-games with unpaid players, which are described by a TUgame and two categories of players, paid and unpaid. Unpaid players participate in the cooperative game but are not rewarded for their participation, for instance for legal reasons. The objective is then to determine how the contributions of unpaid players are redistributed among the paid players. To meet this goal, we introduce and characterize axiomatically three values that are inspired by the Shapley value but differ in the way they redistribute the contributions of unpaid players. These values are unified as instances of a more general two-step allocation procedure. |
| Keywords: | Unpaid players, Shapley value, Harsanyi dividends, axioms, two-step procedure, Priority value |
| JEL: | C72 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:crb:wpaper:2025-11 |
| By: | Parma Bains |
| Abstract: | Consensus mechanisms underpin the effective operation of blockchains by ensuring a single consistent and honest ledger. The design and implementation of these consensus mechanisms can improve or impede the ability of regulatory and supervisory authorities to achieve their objectives and mandates. This paper provides an update to the Fintech Note Blockchain Consensus Mechanisms: A Primer for Supervisors (2022) by reviewing the growth of existing consensus mechanisms, exploring new consensus mechanisms, and the development of layer 2 protocols. It is a non-technical and accessible note to provide supervisors a broad understanding of the technology within their remits. |
| Keywords: | Distributed ledger technology; dlt; blockchain; consensus; fintech; supervision; layer2; crypto; digital; bitcoin; ethereum; solana |
| Date: | 2025–09–19 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/186 |
| By: | Thomas Graeber (University of Zurich); Shakked Noy (Massachusetts Institute of Technology); Christopher Roth (University of Cologne, CEPR, NHH, and MPI for Research on Collective Goods Bonn) |
| Abstract: | Information often shapes behavior regardless of its quality: unreliable claims wield influence, while reliable ones are neglected. We propose that this occurs in part because word-of-mouth transmission tends to preserve claims while dropping information about their reliability. We conduct controlled online experiments where participants listen to economic forecasts and pass them on through voice messages. Other participants listen either to original or transmitted audio recordings and report incentivized beliefs. Across various transmitter incentive schemes, a claim’s reliability is lost in transmission much more than the claim itself. Reliable and unreliable information, once filtered through transmission, impact listener beliefs similarly. Mechanism experiments show that reliability is lost not because it is perceived as less relevant or harder to transmit, but because it is less likely to come to mind during transmission. A simple associative-memory framework suggests that reliability information may be less likely to come to mind either because it is less likely to be cued by transmission requests or because attempts to retrieve it face greater interference. Evidence from our experiments, a large corpus of everyday conversations, and economic TV news supports both of these mechanisms. |
| Keywords: | Information Transmission, Word-of-mouth, Reliability, Memory, TV news |
| JEL: | D83 D87 D91 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:371 |