nep-mic New Economics Papers
on Microeconomics
Issue of 2022‒10‒24
25 papers chosen by
Jing-Yuan Chiou
National Taipei University

  1. It Hurts To Ask By Roland Bénabou; Ania Jaroszewicz; George Loewenstein
  2. The Emergence of Fads in a Changing World By Wanying Huang
  3. Shocks to Issue Salience and Electoral Competition By Enriqueta Aragonès; Clara Ponsatí
  4. Report-Dependent Utility and Strategy-Proofness By Meisner, Vincent
  5. Foreclosure and tunneling with partial vertical ownership By Hunold, Matthias; Petrishcheva, Vasilisa
  6. Comparative Incompleteness: Measurement, Behavioral Manifestations and Elicitation By Edi Karni; Marie-Louise Vierø
  8. The Bargaining Trap By Sebastian Schweighofer-Kodritsch
  9. Efficient Allocations under Ambiguous Model Uncertainty By Hara, Chiaki; Mukerji, Sujoy; Riedel, Frank; Tallon, Jean Marc
  10. Productive Office and Political Elitism By Auerbach, Jan
  11. Leader influence on Politics By Lourdes Rojas Rubio
  12. Entry in First-Price Auctions with Signaling By Olivier Bos; Tom Truyts
  13. A Theory of Crowdfunding Dynamics By Matthew Ellman; Michele Fabi
  14. Lost in objective translation: Awareness of unawareness when unknowns are not simply unknowns By Marie-Louise Vierø
  15. Competitive equilibria and robust efficiency with club goods By Anuj Bhowmik; Japneet Kaur
  16. Cournot–Bertrand comparison under common ownership in a mixed oligopoly By Xu, Lili; Zhang, Yidan; Matsumura, Toshihiro
  17. Interactive Information Design By Frédéric Koessler; Marie Laclau; Tristan Tomala
  18. A Framework for Single-Item NFT Auction Mechanism Design By Jason Milionis; Dean Hirsch; Andy Arditi; Pranav Garimidi
  19. Gaussian Agency problems with memory and Linear Contracts By Eduardo Abi Jaber; St\'ephane Villeneuve
  20. M&A and Early Investment Decisions by Digital Platforms By Zelda Brutti; Luis Rojas
  21. Markovian Persuasion with Two States By Galit Ashkenazi-Golan; Pen\'elope Hern\'andez; Zvika Neeman; Eilon Solan
  22. Safe Implementation By Malachy James Gavan; Antonio Penta
  23. The Emergence of Enforcement By Anderlini, L.; Felli, L.; Piccone, M.;
  24. Long Information Design By Frédéric Koessler; Marie Laclau; Jérôme Renault; Tristan Tomala
  25. False-name-proof and Strategy-proof Voting Rules under Separable Preferences By Federico Fioravanti; Massó Jordi

  1. By: Roland Bénabou; Ania Jaroszewicz; George Loewenstein
    Abstract: We analyze the offering, asking, and granting of help or other benefits as a three-stage game with bilateral private information between a person in need of help and a potential help-giver. Asking entails the risk of rejection, which can be painful: since unawareness of the need can no longer be an excuse, a refusal reveals that the person in need, or the relationship, is not valued very much. We show that a failure to ask can occur even when most helpers would help if told about the need, and that even though a greater need makes help both more valuable and more likely to be granted, it can reduce the propensity to ask. When potential helpers concerned about the recipient’s ask-shyness can make spontaneous offers, this can be a double-edged sword: offering reveals a more caring type and helps solve the failure-to-ask problem, but not offering reveals a not-so-caring one, and this itself deters asking. This discouragement effect can also generate a trap where those in need hope for an offer while willing helpers hope for an ask, resulting in significant inefficiencies.
    JEL: D03 D23 D64 D82 D83 D91
    Date: 2022–09
  2. By: Wanying Huang
    Abstract: We study how fads emerge from social learning in a changing environment. We consider a sequential learning model in which rational agents arrive in order, each acting only once, and the underlying unknown state is constantly evolving. Each agent receives a private signal, observes all past actions of others, and chooses an action to match the current state. Since the state changes over time, cascades cannot last forever, and actions fluctuate too. We show that in the long run, actions change more often than the state. This describes many real-life faddish behaviors in which people often change their actions more frequently than what is necessary.
    Date: 2022–08
  3. By: Enriqueta Aragonès; Clara Ponsatí
    Abstract: We propose a two party electoral competition model to analyze the effects of an exogenous shock over the relative issue salience on the strategic policy choices of the parties. We find that both parties strategically shift their policy choices from their ideal points towards the ideal point of the median voter of the newly salient issue. The polarization of the distribution of the voters preferences produces a disadvantage for one of the parties, which is forced to implement a large policy shift. We argue that a large policy shift may break a party internal balance among its different factions, which in turn may produce important disruptions in the party system. We illustrate our arguments with an analysis of recent events in Catalonia and the UK.
    Keywords: preference shock, relative salience, party consistency
    JEL: D72
    Date: 2021–10
  4. By: Meisner, Vincent (TU Berlin)
    Abstract: Despite the truthful dominant strategy, participants in strategy-proof mechanisms submit manipulated preferences. In our model, participants dislike rejections and enjoy the confirmation from getting what they declared most desirable. Formally, the payoff from a match decreases in its position in the submitted ranking such that a strategic trade-off between preference intensity and match probability arises. This trade-off can trigger the commonly observed self-selection strategies. We show that misrepresentations can persist for arbitrarily small report-dependent components. However, honesty is guaranteed to be optimal if and only if there is no conflict between the quality and feasibility of a match.
    Keywords: market design; matching; school choice; self-regarding preferences; strategy-proof mechanisms;
    JEL: D47 D78 D81 D91
    Date: 2021–10–21
  5. By: Hunold, Matthias; Petrishcheva, Vasilisa
    Abstract: We study the incentives of firms that hold partial vertical ownership to foreclose rivals. Compared to a full vertical merger, with partial ownership, a firm may obtain only part of the target's profit but may nevertheless be able to influence the target's strategy significantly. The target may be either a supplier or a customer, which opens the scope for either input foreclosure or customer foreclosure. We show that the incentives to foreclose can be higher, equal, or even lower with partial ownership than with a vertical merger, depending on how the protection of minority shareholders and transfer price regulations are specified.
    Keywords: Backward ownership,Entry deterrence,Foreclosure,Minority shareholdings,Partial ownership,Uniform pricing,Vertical integration
    JEL: G34 L22 L40
    Date: 2022
  6. By: Edi Karni (Johns Hopkins University); Marie-Louise Vierø (Department of Economics and Business Economics, Aarhus University)
    Abstract: This paper introduces measures of overall incompleteness of preference relations under risk and uncertainty, as well as measures of incompleteness of beliefs and tastes. These measures are used to define “more incomplete than†relations among different preference relations. We show how greater incompleteness is manifested in the representations of decision makers’ preferences and illustrate its behavioral implications in a simple portfolio choice problem. In addition, the paper introduces incentive compatible schemes of eliciting the degrees of overall incompleteness and those of beliefs and tastes.
    Keywords: Incomplete preferences, Knightian uncertainty, Comparative incompleteness, Elicitation mechanisms
    JEL: D81
    Date: 2022–09–26
  7. By: Chang Koo Chi (Yonsei Univ); Kyoung Jin Choi (University of Calgary Haskayne School of Business)
    Abstract: This paper presents a dual approach to the standard agency model. We formulate the dual problem corresponding to the principal-agent problem under the assumption that the firstorder approach (FOA) is valid. This dual formulation generates a convex conjugate of a distinctive form, which transforms the agent’s utility from compensation into a dual functional. The dual problem features a simple convex structure, which enables us to perform a comprehensive analysis for the primal problem. We derive novel and more tractable conditions for existence and uniqueness of an optimal FOA contract in terms of the functional. Furthermore, the dual approach provides us with illuminating insights into the previous nonexistence results.
    Keywords: Existence, moral hazard, principal-agent models, Lagrange duality
    JEL: D82 D86
    Date: 2022–06
  8. By: Sebastian Schweighofer-Kodritsch
    Abstract: I revisit the Rubinstein (1982) model for the classic problem of price haggling and show that bargaining can become a “trap,” where equilibrium leaves one party strictly worse off than if no transaction took place (e.g., the equilibrium price exceeds a buyer’s valuation). This arises when one party is impatient about capturing zero surplus (e.g., Rubinstein’s example of fixed bargaining costs). Augmenting the protocol with unilateral exit options for responding bargainers generally removes the trap.
    Keywords: alternating offers, bargaining, time preferences, haggling costs, outside options
    JEL: C78 D03 D74
    Date: 2022
  9. By: Hara, Chiaki (Center for Mathematical Economics, Bielefeld University); Mukerji, Sujoy (Center for Mathematical Economics, Bielefeld University); Riedel, Frank (Center for Mathematical Economics, Bielefeld University); Tallon, Jean Marc (Center for Mathematical Economics, Bielefeld University)
    Abstract: We investigate consequences of ambiguity on efficient allocations in an exchange economy. Ambiguity is embodied in the model uncertainty perceived by the consumers: they are unsure what would be the appropriate probability measure to apply to evaluate consumption and keep in consideration a set $\mathcal{P}$ of alternative probabilistic laws. Consumers are heterogeneously ambiguity averse with smooth ambiguity preferences and $\mathcal{P}$ is point identified, and the aggregate risk is ambiguous. Our analysis addresses, in particular, the full range of set-ups where under expected utility the efficient consumption sharing rule is a linear function of the aggregate endowment. We identify the systematic differences ambiguity aversion introduces to efficient sharing rules in these environments. We also characterize the representative consumer and use it to find implications of heterogeneity in ambiguity aversion for the pricing kernel. The pricing kernel is shown to be qualitatively different under heterogeneity and has the empirically compelling implication that the Sharpe ratio is counter-cyclical.
    Date: 2022–10–07
  10. By: Auerbach, Jan
    Abstract: Many representative democracies experience political elitism in the sense that virtually all members of the national legislature are high-income citizens. However, evidence suggests that electoral prospects are independent of income in the sense that voters do not consider low-income candidates less competent or less likely to get their vote. I explore a financial-rewards channel through which political elitism can arise by self-selection when citizen-candidates’ electoral prospects are independent of income. Elitism arises if and only if the office is attractive and the difference in differences in income between holding office, collecting a salary and outside income, and being a private citizen is large enough. Higher income premia or more productive outside activity for high-income citizens are not necessary or sufficient. Outside income limits can always prevent elitism, while salary reform often cannot. The results offer context for some somewhat mixed evidence on the association between politician pay and politician background.
    Keywords: Political Elitism, Citizen-Candidates, Productive Office, Outside Income
    JEL: D72
    Date: 2022–09–03
  11. By: Lourdes Rojas Rubio (Université de Cergy-Pontoise, THEMA)
    Abstract: This paper argues that interest-group leaders can influence policies and electoral outcomes through socialisation, endorsement, or both. The leader’s decision of which mechanisms to implement depends on the characteristics of the group. Each mechanism differs in its effect on group members’ preferences and candidates’ announced political platforms. Leader endorsement helps to convey information to all participants and influences group members’ preferences. Instead, leader socialisation permanently shapes group members’ preferences toward his own. I develop four models of political competition, three of which examine separately or jointly the effects of those mechanisms on electoral platforms and outcomes. Furthermore, I illustrate the empirical relevance of the leaders’ mechanisms by discussing the religious leaders’ influence on politics in three case studies from different regions of the world.
    Keywords: Socialisation, endorsement, political competition, leadership, club goods, religion, democratic elections.
    JEL: D02 D72 H4 O57 P48 Z12
    Date: 2022
  12. By: Olivier Bos; Tom Truyts
    Abstract: We study the optimal entry fee in a symmetric private value first-price auction with signaling, in which the participation decisions and the auction outcome are used by an outside observer to infer the bidders’ types. We show that this auction has a unique fully separating equilibrium bidding function. When the bidders’ sensibility for the signaling concern is sufficiently strong, the expected revenue maximizing entry fee is the maximal fee that guarantees full participation. The larger is the bidder's sensibility, the higher is the optimal participation.
    Keywords: first-price auction, entry, monotonic signalling, social status
    JEL: D44 D82
    Date: 2022
  13. By: Matthew Ellman; Michele Fabi
    Abstract: This paper develops a dynamic model of crowdfunding to characterize success rates and welfare, identify optimal transparency and design policies and explain bidding profiles. Inspection costs have two effects on profiles: (1) decreasing pivotality, driven by reduced scope for strategic complementarity as the deadline nears, pushes the slope downwards; (2) a Jensen effect from bidding news also pushes the slope downwards for concave cost distributions, but upwards for convex costs. Combining can generate a U-shape. Non-disclosure of funding progress always yields higher welfare than full transparency given homogeneous costs. However, cost heterogeneity favours disclosure by enabling early bidders to activate otherwise passive, higher cost bidders. We also optimize pricing and thresholds under success-maximization.
    Keywords: crowdfunding dynamics, subscription games, information acquisition, pivotality, strategic complementarity, disclosure rules
    JEL: D26 C73 L12 M13
    Date: 2022–05
  14. By: Marie-Louise Vierø (Department of Economics and Business Economics, Aarhus University)
    Abstract: This paper models decision makers who are cognisant of their own potential unawareness and who may have an a priori sense that not all unknowns are equal. Karni and Vierø (2017) provide a choice theoretic model of growing awareness when the decision maker has awareness of her unawareness. Their framework, together with their axiomatic structure, results in all potential consequences that the decision maker is unaware of being treated identically from an a priori point of view. However, in the context of growing awareness, one can argue for differences in valuations a priori. Different types of surprises could be anticipated in different situations. This paper proposes a model that accommodates such a priori differences in anticipation. It allows for subjectively different unknowns and provides a representation of preferences that has an expected utility structure, but where the attitudes towards differently perceived unknowns are allowed to differ.
    Keywords: Awareness, Unawareness, Unknown unknowns, Utility of indescribable consequences, Attitudes towards the unknown
    JEL: D8 D81 D83
    Date: 2022–09–26
  15. By: Anuj Bhowmik (Indian Statistical Institute, Kolkata); Japneet Kaur (Indira Gandhi Institute of Development Research)
    Abstract: The paper establishes an equivalence theorem (which states that an allocation is a club equilibrium allocation if and only if it is robustly efficient) in a setting where individuals not only trade private goods but can choose to become members of a finite number of clubs, where each club is defined by the external characteristics of its participants and the project in which they are involved. Here competitive equilibrium allocations are characterized using the veto power of the set of all agents, i.e. rather than considering the blocking power of multiple coalitions, we only take the coalition comprising all agents and study its blocking power in a group of economies attained by slightly modifying each agent's initial endowment.
    Keywords: Club goods, Robustly efficient allocations, core-Walras equivalence, Walrasian equilibria
    JEL: D50 D51 D60 D61 D71
    Date: 2022–09
  16. By: Xu, Lili; Zhang, Yidan; Matsumura, Toshihiro
    Abstract: Price competition is more intense than quantity competition in private oligopolies, wherein all firms are profit maximizers. However, in mixed oligopolies where one state-owned public firm competes with profit-maximizing private firms, price competition may not provide tougher competition than quantity competition. In this study, we introduce common ownership, a distinct feature of recent financial markets, into a mixed oligopoly model and investigate how common ownership affects this ranking. We find that under common ownership, quantity competition is likely to be tougher than price competition. Moreover, we find that common ownership harms welfare regardless of competition mode. Common ownership enhances private firms’ profits under Bertrand competition while these may decline under Cournot competition.
    Keywords: Cournot model; Bertrand model; common ownership; mixed oligopoly
    JEL: D4 D43 H42 L13
    Date: 2022–09–20
  17. By: Frédéric Koessler (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Marie Laclau (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Tristan Tomala (GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique, HEC Paris - Ecole des Hautes Etudes Commerciales)
    Abstract: We study the interaction between multiple information designers who try to influence the behavior of a set of agents. When each designer can choose information policies from a compact set of statistical experiments with countable support, such games always admit subgame perfect equilibria. When designers produce public information, every equilibrium of the simple game in which the set of messages coincides with the set of states is robust in the sense that it is an equilibrium with larger and possibly infinite and uncountable message sets. The converse is true for a class of Markovian equilibria only. When designers produce information for their own corporation of agents, robust pure strategy equilibria exist and are characterized via an auxiliary normal form game in which the set of strategies of each designer is the set of outcomes induced by Bayes correlated equilibria in her corporation.
    Keywords: Statistical experiments,Splitting games,Sharing rules,Information design,Bayesian persuasion
    Date: 2022
  18. By: Jason Milionis; Dean Hirsch; Andy Arditi; Pranav Garimidi
    Abstract: Lately, Non-Fungible Tokens (NFTs), i.e., uniquely discernible assets on a blockchain, have skyrocketed in popularity by addressing a broad audience. However, the typical NFT auctioning procedures are conducted in various, ad hoc ways, while mostly ignoring the context that the blockchain provides. One of the main targets of this work is to shed light on the vastly unexplored design space of NFT Auction Mechanisms, especially in those characteristics that fundamentally differ from traditional and more contemporaneous forms of auctions. We focus on the case that bidders have a valuation for the auctioned NFT, i.e., what we term the single-item NFT auction case. In this setting, we formally define an NFT Auction Mechanism, give the properties that we would ideally like a perfect mechanism to satisfy (broadly known as incentive compatibility and collusion resistance) and prove that it is impossible to have such a perfect mechanism. Even though we cannot have an all-powerful protocol like that, we move on to consider relaxed notions of those properties that we may desire the protocol to satisfy, as a trade-off between implementability and economic guarantees. Specifically, we define the notion of an equilibrium-truthful auction, where neither the seller nor the bidders can improve their utility by acting non-truthfully, so long as the counter-party acts truthfully. We also define asymptotically second-price auctions, in which the seller does not lose asymptotically any revenue in comparison to the theoretically-optimal (static) second-price sealed-bid auction, in the case that the bidders' valuations are drawn independently from some distribution. We showcase why these two are very desirable properties for an auction mechanism to enjoy, and construct the first known NFT Auction Mechanism which provably possesses such formal guarantees.
    Date: 2022–09
  19. By: Eduardo Abi Jaber (X); St\'ephane Villeneuve (TSE-R)
    Abstract: Can a principal still offer optimal dynamic contracts that are linear in end-of-period outcomes when the agent controls a process that exhibits memory? We provide a positive answer by considering a general Gaussian setting where the output dynamics are not necessarily semi-martingales or Markov processes. We introduce a rich class of principal-agent models that encompasses dynamic agency models with memory. From the mathematical point of view, we develop a methodology to deal with the possible non-Markovianity and non-semimartingality of the control problem, which can no longer be directly solved by means of the usual Hamilton-Jacobi-Bellman equation. Our main contribution is to show that, for one-dimensional models, this setting always allows for optimal linear contracts in end-of-period observable outcomes with a deterministic optimal level of effort. In higher dimension, we show that linear contracts are still optimal when the effort cost function is radial and we quantify the gap between linear contracts and optimal contracts for more general quadratic costs of efforts.
    Date: 2022–09
  20. By: Zelda Brutti; Luis Rojas
    Abstract: We propose an original theoretical framework that models early investment decisions of digital platform startups and use it to study how merger and acquisition policy affects consumer welfare by shaping such decisions. We formalize the investment options faced by digital platforms into a dual margin: investment in ‘customer engagement technology’, directed towards expanding the user base and in ‘intermediation technology’, directed towards lowering operational costs. Sinergies through technological transfer and increased investment incentives in customer engagement explain consumer welfare improvements in the case of M&As occurring between platforms with disjoint user bases. On the other hand, lower competition erodes consumer welfare in the case of allowing M&As between platforms with overlapping user bases. We conclude that M&A policy guidance should depend on the relationship between the incumbent’s and startup’s target users and on the ability of the startup to catch up with the incumbent.
    Keywords: digital platforms, mergers and acquisitions, investment
    JEL: L4 L81 O3 D25
    Date: 2021–12
  21. By: Galit Ashkenazi-Golan; Pen\'elope Hern\'andez; Zvika Neeman; Eilon Solan
    Abstract: This paper addresses the question of how to best communicate information over time in order to influence an agent's belief and induced actions in a model with a binary state of the world that evolves according to a Markov process, and with a finite number of actions. We characterize the sender's optimal message strategy in the limit, as the length of each period decreases to zero. The optimal strategy is not myopic. Depending on the agent's beliefs, sometimes no information is revealed, and sometimes the agent's belief is split into two well-chosen posterior beliefs.
    Date: 2022–09
  22. By: Malachy James Gavan; Antonio Penta
    Abstract: We introduce Safe Implementation, a notion of implementation that adds to the standard requirements the restriction that deviations from the baseline solution concept induce outcomes that are acceptable. The primitives of Safe Implementation therefore include both a Social Choice Correspondence, as standard, and an Acceptability Correspondence, each mapping every state of the world to a subset of allocations. This framework generalizes standard notions of implementation, and can accommodate a variety of considerations, including robustness concerns with respect to mistakes in play, model misspecification, behavioral considerations, state-dependent feasibility restrictions, limited commitment, etc. We provide results both for general solution concepts and for the case in which agents' interaction is modelled by Nash Equilibrium. In the latter case, we identify necessary and sufficient conditions (namely, Comonotonicity and safety-no veto) that restrict the joint behavior of the Social Choice and Acceptability Correspondences. These conditions are more stringent than Maskin's (1978), but coincide with them when the safety requirements are vacuous. We also show that these conditions are quite permissive in important economic applications, such as environments with single-crossing preferences and in problems of efficient allocation of in- divisible goods, but also that Safe Implementation can be very demanding in environments with 'rich' preferences, regardless of the underlying solution concept.
    Keywords: comonotonicity, mechanism design, implementation, robustness, resilience, safe implementation, safety no-veto
    JEL: C72 D82
    Date: 2022–09
  23. By: Anderlini, L.; Felli, L.; Piccone, M.;
    Abstract: We ask how enforcement can endogenously emerge in a landscape in which only raw power, iron ï¬ sts, govern the interaction of agents. If two agents are ranked in terms of power, the more powerful one can expropriate, at a cost, the less powerful one. Alternatively, both agents can engage in surplus-augmenting cooperation (e.g. trade). If expropriation is not too costly and cooperation is not overwhelmingly productive, for any pair of ranked agents the possibility of expropriation prevents cooperation. The more powerful agent ï¬ nds it proï¬ table to expropriate the less powerful one. However, if expropriating agents who are net expropriators of others is cheaper, then a more powerful agent may endogenously become an “enforcer†for lower ranked agents. In equilibrium, the more powerful agent expropriates the less powerful ones by smaller amounts, and the less powerful ones cooperate and refrain from expropriating agents below them. This is because if they do not the more powerful agent will ï¬ nd it cheaper to expropriate only them by a larger amount. Surprisingly, the details of the power structure are irrelevant for enforcement to emerge as an equilibrium phenomenon provided that the original jungle is inhabited by a sufficiently large number of agents and by one that dominates all others.
    Keywords: Enforcement, Jungle, Power Structures, Rule of Law
    JEL: C79 D00 D01 D31 K19 K40 K49
    Date: 2022–08–30
  24. By: Frédéric Koessler (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Marie Laclau (HEC Paris - Ecole des Hautes Etudes Commerciales, GREGHEC - Groupement de Recherche et d'Etudes en Gestion - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique); Jérôme Renault (TSE-R - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Tristan Tomala (GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique, HEC Paris - Ecole des Hautes Etudes Commerciales)
    Abstract: We analyze information design games between two designers with opposite preferences and a single agent. Before the agent makes a decision, designers repeatedly disclose public information about persistent state parameters. Disclosure continues until no designer wishes to reveal further information. We consider environments with general constraints on feasible information disclosure policies. Our main results characterize equilibrium payoffs and strategies of this long information design game and compare them with the equilibrium outcomes of games where designers move only at a single predetermined period. When information disclosure policies are unconstrained, we show that at equilibrium in the long game, information is revealed right away in a single period; otherwise, the number of periods in which information is disclosed might be unbounded. As an application, we study a competition in product demonstration and show that more information is revealed if each designer could disclose information at a predetermined period. The format that provides the buyer with most information is the sequential game where the last mover is the ex-ante favorite seller.
    Keywords: Bayesian persuasion,Concavification,Convexification,Information design,Mertens Zamir solution,Product demonstration,Splitting games,Statistical experiments,Stochastic games
    Date: 2022
  25. By: Federico Fioravanti (Universidad Nacional del Sur/CONICET); Massó Jordi (Universitat Autònoma de Barcelona)
    Abstract: We consider the problem of a society that uses a voting rule to select a subset from a given set of objects (candidates, binary issues or alike). We assume that voters’preferences over subsets of objects are separable: Adding an object to a set leads to a better set if and only if the object is good (as a singleton set, the object is better thanthe empty set). A voting rule is strategy-proof if no voter benefits by not revealing its preferences truthfully and it is false-name-proof if no voter gains by submitting severalvotes under other identities. We characterize all voting rules that verify false-nameproofness, strategy-proofness, unanimity, anonymity, and neutrality as either the classof voting by quota one (all voters can be decisive for all objects) or the class of voting by full quota (all voters can veto all objects).
    Keywords: False-name-proofness; Strategy-proofness; Separable Preferences
    JEL: D71
    Date: 2022–09

This nep-mic issue is ©2022 by Jing-Yuan Chiou. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.