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on Microeconomics |
| By: | Masayuki Odora (Graduate School of Economics, Waseda University) |
| Abstract: | This study considers a binary election in which imperfectly informed voters have partially conflicting interests. There is an unambiguously correct alternative in some states, while voters disagree on the better alternative in other states. The true state is unknown to anybody, but each voter receives a private signal about the state. This study identifies the circumstances in which the probability that a society utilizing the majority rule reaches the correct decisions does not converge to 1, thus showing the failure of an asymptotic Condorcet Jury Theorem. Moreover, we show that the voting behavior never reflects voters’ private information in the large elections. |
| Keywords: | bargaining; Information aggregation; partially conflicting interests; Condorcet Jury Theorem |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:wap:wpaper:2308&r=mic |
| By: | Li, Jianpei; Zhang, Wanzhu |
| Abstract: | Personal data protection regulations typically require a seller to obtain consumers' explicit consent before processing their information. We model this requirement as an anonymous option, allowing consumers to maintain their anonymity when purchasing a product from a seller. We analyze a monopolist's incentive to offer such an option in a model of repeated purchases and limited commitment. Although collecting information implies full consumer surplus extraction in the second period, the seller is better off by offering the anonymous option. This is because it enables the seller to commit to a high second-period price for unrecognized consumers and prevents the consumers' strategic delay of consumption in the first period. In contrast, consumers are worse off because of increased prices and reduced demand. Consequently, privacy regulations mandating a compulsory anonymous option may actually fail to protect consumers' welfare. |
| Keywords: | anonymous option; personalized pricing; privacy concern |
| JEL: | D4 D8 L1 |
| Date: | 2024–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120010&r=mic |
| By: | Maxim Senkov; Arseniy Samsonov |
| Abstract: | We compare two scenarios in a model where politicians offer local public goods to heterogeneous voters: one where politicians have access to data on voters and thus can target specific ones, and another where politicians only decide on the level of spending. When the budget is small, or the public good has a high value, access to voter information leads the winner to focus on poorer voters, enhancing voter welfare. With a larger budget or less crucial public goods, politicians target a narrow group of swing voters, which harms the voter welfare. |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2401.04273&r=mic |
| By: | Houda Nait El Barj; Theophile Sautory |
| Abstract: | We study the dynamics of opinions in a setting where a leader has a payoff that depends on agents' beliefs and where agents derive psychological utility from their beliefs. Agents sample a signal that maximises their utility and then communicate with each other through a network formed by disjoint social groups. The leader has a choice to target a finite set of social groups with a specific signal to influence their beliefs and maximise his returns. Heterogeneity in agents' preferences allows us to analyse the evolution of opinions as a dynamical system with asymmetric forces. We apply our model to explain the emergence of hatred and the spread of racism in a society. We show that when information is restricted, the equilibrium level of hatred is determined solely by the belief of the most extremist agent in the group regardless of the inherent structure of the network. On the contrary, when information is dense, the space is completely polarised in equilibrium with the presence of multiple "local truths" which oscillate in periodic cycles. We find that when preferences are uniformly distributed, the equilibrium level of hatred depends solely on the value of the practical punishment associated with holding a hate belief. Our finding suggests that an optimal policy to reduce hatred should focus on increasing the cost associated with holding a racist belief. |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2401.07178&r=mic |
| By: | Wesley H. Holliday |
| Abstract: | In the context of social choice theory with ordinal preferences, we say that the defensible set is the set of alternatives $x$ such that for any alternative $y$, if $y$ beats $x$ in a head-to-head majority comparison, then there is an alternative $z$ that beats $y$ in a head-to-head majority comparison by a margin at least as large as the margin by which $y$ beat $x$. We show that any ordinal voting method satisfying two well-known axioms from voting theory--positive involvement and the Condorcet winner criterion--refines the defensible set. Using this lemma, we prove an impossibility theorem: there is no such voting method that also satisfies the Condorcet loser criterion, resolvability, and a common invariance property for Condorcet methods, namely that the choice of winners depends only on the relative sizes of majority margins. |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2401.05657&r=mic |
| By: | Mitra, Manipushpak (Economic Research Unit, Indian Statistical Institute); Ray, Indrajit (Cardiff Business School, Cardiff University); Roy, Souvik (Applied Statistics Unit, Indian Statistical Institute) |
| Abstract: | For a strategic market game (as introduced by Shapley and Shubik), following Dubey and Rogawski (1990), we provide a full explicit characterisation of the set of trading equilibria (in which all goods are traded at a positive price), for both the “buy and sell†and the “buy or sell†versions of this model under standard assumptions on the utility functions. We interpret and illustrate our equilibrium-characterising conditions; we also provide simple examples of trading equilibria, including those of non-interior strategy profiles (in which at least one trader is using the whole endowment in at least one good or money). |
| Keywords: | strategic market game ; trading equilibrium ; interior profile ; buy and sell ; buy or sell JEL codes: C72 ; D44 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:wcreta:83&r=mic |
| By: | Klas Markstr\"om; S{\o}ren Riis; Bei Zhou |
| Abstract: | In this paper we extend the study of Arrow's generalisation of Black's single-peaked domain and connect this to domains where voting rules satisfy different versions of independence of irrelevant alternatives. First we report on a computational generation of all non-isomorphic Arrow's single-peaked domains on $n\leq 9$ alternatives. Next, we introduce a quantitative measure of richness for domains, as the largest number $r$ such that every alternative is given every rank between 1 and $r$ by the orders in the domain. We investigate the richness of Arrow's single-peaked domains and prove that Black's single-peaked domain has the highest possible richness, but it is not the only domain which attains the maximum. After this we connect Arrow's single-peaked domains to the discussion by Dasgupta, Maskin and others of domains on which plurality and the Borda count satisfy different versions of Independence of Irrelevant alternatives (IIA). For Nash's version of IIA and plurality, it turns out the domains are exactly the duals of Arrow's single-peaked domains. As a consequence there can be at most two alternatives which are ranked first in any such domain. For the Borda count both Arrow's and Nash's versions of IIA lead to a maximum domain size which is exponentially smaller than $2^{n-1}$, the size of Black's single-peaked domain. |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2401.12547&r=mic |
| By: | Brian Hill (HEC Paris - Recherche - Hors Laboratoire - HEC Paris - Ecole des Hautes Etudes Commerciales, CNRS - Centre National de la Recherche Scientifique, 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) |
| Abstract: | Although much of the theoretical and applied literature involving decision under ambiguity works under the assumption of uncertainty aversion, experimental evidence suggests that it is not a universal behavioural trait. This paper introduces and axiomatises the family of α-UA (for α-Uncertainty Attitude) preferences: a simple extension of uncertainty averse preferences with a Hurwicz-style mixing coefficient, so as to admit a richer range of uncertainty attitudes. The parameters of the model are uniquely identified in our characterisation. It provides, in the Hurwicz α-maxmin EU special case, a new resolution of a long-standing identification problem. It also yields novel models, including extensions of variational and multiplier preferences. Comparative statics support the interpretation of the mixing coefficient as an index of imprecision aversion. In a standard portfolio problem, the model yields the intuitive relationship between imprecision aversion and investment in an uncertain asset: as the former increases, the latter decreases. |
| Keywords: | Decision under uncertainty, Ambiguity, Uncertainty aversion, Imprecision attitude, Objective imprecision, Multiple priors, α-maxmin EU, Multiplier preferences |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02428398&r=mic |