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on Economic Design |
| By: | José Alcalde (IUDESP, University of Alicante); Matthias Dahm (School of Economics, University of Leicester) |
| Abstract: | Refugee resettlement is one of the most important challenges of our time. We consider a set of host States required to collectively provide a given number of resettlement places. International cooperation must be voluntary, but host States can be compensated. We first show that a market approach can generate sufficient resettlement places. However, there are pervasive opportunities for manipulation. We reformulate the Ausubel (2004) auction as a procurement auction for resettlement places, but allow for the possibility that procurement costs are covered by the participants in the auction (Cramton et al., 2013). This Compensation Mechanism determines a (heterogeneous) set of transfers in exchange for resettlement places provided and allows host States to specialise in providing places or finance resettlement in other States. We show that sincere bidding is a dominant strategy and that it leads to efficient allocations of the required number of places. |
| Keywords: | Asylum Seekers; Refugees; Resettlement Places; Refugee Quotas; Burden-Sharing; Responsibility-Sharin |
| JEL: | D44 D47 |
| Date: | 2025–09–09 |
| URL: | https://d.repec.org/n?u=RePEc:ris:qmetal:021526 |
| By: | Sergiu Hart; Noam Nisan |
| Abstract: | In the setup of selling one or more goods, various papers have shown, in various forms and for various purposes, that a small change in the distribution of a buyer's valuations may cause only a small change in the possible revenue that can be extracted. We prove a simple, clean, convenient, and general statement to this effect: let X and Y be random valuations on k additive goods, and let W(X, Y) be the Wasserstein (or "earth mover's") distance between them; then sqrt(Rev(X))-sqrt(Rev(Y)) |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.15735 |
| By: | Taubman, Dmitriy |
| Abstract: | We introduce a new collection auction mechanism for selling multiple identical items to a single winner—the Prefix-Based Collection Auction. The auction restricts the winner to a prefix of their bids and imposes a payment rule based on both an internal prefix sum and an external second price. This dual structure offers strong protection against both market power and bidder collusion, while maintaining intuitive and truthful bidding behavior. The mechanism is robust, simple to implement, and has potential applications in art-collection markets, online advertising, and other environments where bundle demand is critical. |
| Keywords: | auctions; mechanism design; game theory; collusion resistance; market power; prefix structure |
| JEL: | A10 A11 |
| Date: | 2025–08–21 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125907 |
| By: | Sumit Goel; Jeffrey Zeidel |
| Abstract: | We study $k$-price auctions in a complete information environment and characterize all pure-strategy Nash equilibrium outcomes. In a setting with $n$ agents having ordered valuations, we show that any agent, except those with the lowest $k-2$ valuations, can win in equilibrium. As a consequence, worst-case welfare increases monotonically as we go from $k=2$ (second-price auction) to $k=n$ (lowest-price auction), with the first-price auction achieving the highest worst-case welfare. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.05738 |
| By: | Pan-Yang Su; Yi Ju; Scott Moura; Shankar Sastry |
| Abstract: | We propose a general two-period model where electrical vehicles (EVs) can reserve charging sessions in the day-ahead market and swap them in the real-time market. Under the model, we explore several candidate mechanisms for running the two markets, compared using several normative properties such as incentive compatibility, efficiency, reservation awareness, and budget balance. Specifically, reservation awareness is the only property coupling the two markets and dictates that an EV will not get a lower utility by joining the real-time market. Focusing on the real-time market, we show that two variants of the classical Vickrey-Clarke-Groves (VCG) mechanism do not satisfy all the proposed properties; specifically, one is not reservation-aware, while the other is not budget-balanced. Moreover, we show that no mechanism satisfies some combinations of the properties. Then, we propose to use a posted-price mechanism to resolve the issue, which turns out to be the dynamic pricing mechanism adopted in many real-world systems. The proposed mechanism has no efficiency guarantee but satisfies all the other properties. To improve efficiency, we propose to use a VCG auction in the day-ahead market that guides the reserve prices in the real-time market. When EVs' valuations in the two markets are highly correlated, the proposed approach results in highly efficient outcomes. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.00270 |
| By: | Richard Cole; Pranav Jangir |
| Abstract: | In real-world settings of the Deferred Acceptance stable matching algorithm, such as the American medical residency match (NRMP), school choice programs, and various national university entrance systems, candidates need to decide which programs to list. In many of these settings there is an initial phase of interviews or information gathering which affect the preferences on one or both sides. We ask: which interviews should candidates seek? We study this question in a model, introduced by Lee (2016) and modified by Allman and Ashlagi (2023), with preferences based on correlated cardinal utilities. We describe a distributed, low-communication strategy for the doctors and students, which lead to non-match rates of $e^{(-\widetilde{O}(\sqrt{k}))}$ in the residency setting and $e^{(-\widetilde{O}(k))}$ in the school-choice setting, where $k$ is the number of interviews per doctor in the first setting, and the number of proposals per student in the second setting; these bounds do not apply to the agents with the lowest public ratings, the bottommost agents, who may not fare as well. We also obtain bounds on the expected utilities each non-bottommost agent obtains. These results are parameterized by the capacity of the hospital programs and schools. Larger capacities improve the outcome for the hospitals and schools, but don't significantly affect the outcomes of the doctors or students. Finally, in the school choice setting we obtain an $\epsilon$-Nash type equilibrium for the students apart from the bottommost ones; importantly, the equilibrium holds regardless of the actions of the bottommost students. We also discuss to what extent this result extends to the residency setting. We complement our theoretical results with an experimental study that shows the asymptotic results hold for real-world values of $n$. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2506.19345 |
| By: | Martin, Julien; Pesendorfer, Martin; Shannon, Jack |
| Abstract: | Common values auction models, where bidder decisions depend on noisy signals of common values, provide predictions about Bayesian Nash equilibrium (BNE) outcomes. In settings where these common values can be estimated, these predictions can be tested. We propose a series of tests, robust to assumptions about the signal structure, to determine whether the observed data could have been generated by a Bayesian Nash equilibrium. In the setting of oil and gas lease auctions in New Mexico, we nd evidence that participation decisions are correlated and that participants system- atically underbid in light of ex post outcomes. |
| Keywords: | testing; collusion; auctions |
| JEL: | D44 L10 L40 |
| Date: | 2025–08–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:128285 |
| By: | Simon Finster (FAIRPLAY - IA coopérative : équité, vie privée, incitations - CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - GENES - Groupe des Écoles Nationales d'Économie et Statistique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - GENES - Groupe des Écoles Nationales d'Économie et Statistique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique - IP Paris - Institut Polytechnique de Paris - Criteo AI Lab - Criteo [Paris] - Centre Inria de l'Institut Polytechnique de Paris - Centre Inria de Saclay - Inria - Institut National de Recherche en Informatique et en Automatique, CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - GENES - Groupe des Écoles Nationales d'Économie et Statistique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - GENES - Groupe des Écoles Nationales d'Économie et Statistique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique); Paul W Goldberg (Departement of Computer of Science University of Oxford - University of Oxford); Edwin Lock (Departement of Computer of Science University of Oxford - University of Oxford, Department of Economics - University of Oxford - University of Oxford) |
| Abstract: | In markets with budget-constrained buyers, competitive equilibria need not be efficient in the utilitarian sense, or maximise the seller's revenue. We consider a setting with multiple divisible goods. Competitive equilibrium outcomes, and only those, are constrained utilitarian efficient, a notion of utilitarian efficiency that respects buyers' demands and budgets. Our main contribution establishes that, when buyers have linear valuations, competitive equilibrium prices are unique and revenue-optimal for a zero-cost seller. |
| Keywords: | budget constraints, Fisher markets, product-mix auctions, arctic auction, market design, efficiency, revenue maximisation, competitive equilibrium |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05234001 |
| By: | Ujjwal Kumar; Souvik Roy |
| Abstract: | We consider a set $E$ of $m$ indivisible goods and a set $N$ consisting of $n \geq 2$ agents. The paper shows that if two agents have \textit{arbitrary} set monotonic valuation functions and the remaining agents have size monotonic valuation functions, then EFX allocations always exist. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.09600 |
| By: | Simon Finster (FAIRPLAY - IA coopérative : équité, vie privée, incitations - CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - GENES - Groupe des Écoles Nationales d'Économie et Statistique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - GENES - Groupe des Écoles Nationales d'Économie et Statistique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique - IP Paris - Institut Polytechnique de Paris - Criteo AI Lab - Criteo [Paris] - Centre Inria de l'Institut Polytechnique de Paris - Centre Inria de Saclay - Inria - Institut National de Recherche en Informatique et en Automatique, CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - GENES - Groupe des Écoles Nationales d'Économie et Statistique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - GENES - Groupe des Écoles Nationales d'Économie et Statistique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We consider a package assignment problem with multiple units of indivisible items. The seller can specify preferences over partitions of their supply between buyers as packaging costs. We propose incremental costs together with a graph that defines cost interdependence to express these preferences. This facilitates the use of linear programming to characterize Walrasian equilibrium prices. Firstly, we show that equilibrium prices are uniform, anonymous, and linear in packages. Prices and marginal gains exhibit a nested structure, which we characterize in closed form for complete graphs. Secondly, we provide sufficient conditions for the existence of package-linear competitive prices using an ascending auction implementation. Our framework of partition preferences ensures fair and transparent dual pricing and admits preferences over the concentration of allocated bundles in the market. |
| Keywords: | linear programming, value graph, partition preferences, Walrasian equilibrium, non-linear pricing, package assignment |
| Date: | 2025–07–07 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05233957 |
| By: | Seongbeom Park |
| Abstract: | The profile-based matching problem is the problem of finding a matching that optimizes profile from an instance $(G, r, \langle u_1, \dots, u_r \rangle)$, where $G$ is a bipartite graph $(A \cup B, E)$, $r$ is the number of utility functions, and $u_i: E \to \{ 0, 1, \dots, U_i \}$ is utility functions for $1 \le i \le r$. A matching is optimal if the matching maximizes the sum of the 1st utility, subject to this, maximizes the sum of the 2nd utility, and so on. The profile-based matching can express rank-maximal matching \cite{irving2006rank}, fair matching \cite{huang2016fair}, and weight-maximal matching \cite{huang2012weight}. These problems can be reduced to maximum weight matching problems, but the reduction is known to be inefficient due to the huge weights. This paper presents the condition for a weight function to find an optimal matching by reducing profile-based matching to the maximum weight matching problem. It is shown that a weight function which represents utilities as a mixed-radix numeric system with base-$(2U_i+1)$ can be used, so the complexity of the problem is $O(m\sqrt{n}(\log{n} + \sum_{i=1}^{r}\log{U_i}))$ for $n = |V|$, $m = |E|$. In addition, it is demonstrated that the weight lower bound for rank-maximal/fair/weight-maximal matching, better computational complexity for fair/weight-maximal matching, and an algorithm to verify a maximum weight matching can be reduced to rank-maximal matching. Finally, the effectiveness of the profile-based algorithm is evaluated with real data for school choice lottery. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.00047 |
| By: | Masanori Kobayashi |
| Abstract: | We study a multi-step persuasion problem involving a Bayesian sender and a non-Bayesian receiver. When the receiver deviates from Bayesian updating, the sender may benefit from -- or be harmed by -- gradually revealing information over time. We show that under divisible updating rules (Cripps, 2018), delaying information provision does not affect the sender's ex-ante value. Focusing on the $\alpha$--$\beta$ rule of Grether (1980), we derive the necessary and sufficient conditions under which the sender is strictly better or worse off under a two-step persuasion scheme. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.12328 |
| By: | Sang-Chul Suh (Department of Economics, University of Windsor); Yuntong Wang (Department of Economics, University of Windsor) |
| Abstract: | This paper considers the river sharing problem first studied in Ambec and Sprumont (2002). We use the Equal Share Proportional Solution (ESPS) for the permit sharing problem introduced in Suh and Wang (2023) to define a solution, also called the ESPS, for the river sharing problem. We first show that a river sharing problem can be divided into a list of subproblems, each of which can be considered as a permit sharing problem (Decomposition Lemma). Then, we apply the ESPS solution to each of the subproblems. The ESPS for the river sharing problem is the aggregation of the ESPS for all the subproblems. We also compare the ESPS with the well-known Downstream Incremental Distribution solution by Ambec and Sprumont (2002). We show that for a dummy agent whose optimal consumption coincides with his initial endowment, the agent obtains his stand-alone benefit in the ESPS. In contrast, the Downstream Incremental Distribution solution may assign welfare levels to dummy agents that are higher than their stand-alone benefits. On the other hand, the ESPS violates the aspiration upper bounds. |
| Keywords: | River, efficiency, welfare distribution, fair allocation. |
| JEL: | D62 C71 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:wis:wpaper:2504 |