Hasil untuk "econ.TH"

Roger F. Sewell

In 1950 Arrow famously showed that there is no social welfare function satisfying four basic conditions. In 1976, on the other hand, Gibbard and Sonnenschein showed that there does exist a unique probabilistic social welfare method that satisfies a different set of strictly stronger conditions. In this paper we discuss a deterministic electoral method satisfying those same stronger conditions in an appropriate sense; it is not a counterexample to either of these theorems. We attach a simple reference implementation written in C with executables for Linux and Windows.

Junjie Chen, Takuro Yamashita

An information broker incentivizes consumers to share their information, while designing an information structure to shape the market segmentation. The information broker is a metaphor for an Internet platform that matches consumers with retailers. We are interested in a market with heterogeneous retailers and heterogeneous consumers. The optimal broking mechanism consists of a simple threshold-based structure where consumers with strong preferences are assigned to the efficient retailer while consumers with weaker preferences are assigned to the inefficient retailer stochastically. Our analysis suggests that the privacy protection policy may have a stronger impact on less competitive retail markets.

Elizabeth Nanami Aoi

In two-sided matching market, when the regional constraints are present, the deferred acceptance (DA) algorithm suffers from undesirable inefficiency due to the artificial allocation of the regional caps among hospitals. We show that, given preferences, there exist allocations that guarantee the efficiency of the DA algorithm. Furthermore, it is equivalent to the FDA algorithm developed by Kamada and Kojima (2015), which endows the latter with an interpretation as a tool for endogenous capacity design. Our proof applies the optimality within the matching with contracts (Hatfield and Milgrom 2005) framework, offering a broadly applicable method for establishing equivalence among DA-based mechanisms.

V. I. Danilov

In 1962, Gale and Shapley \cite{GS} introduced the concept of stable marriages and proved their existence. Since then, the statement of the stability problem has been highly generalized. And a lot of proofs has emerged for the existence in these more general statements. It's time to review them and identify the similarities and differences. First, we will briefly discuss the classical case, because the existence proofs in the general case grew out of it. Or rather, from the idea of "deferred acceptance". When the best of the proposed contracts is temporarily retained until a better offer is received.

Ilona Cserháti, Éva Gyurkovics, Tibor Takács

To model the interaction of fiscal and monetary policy, a novel discrete-time, uncertain, infinite time horizon, dynamic game model is developed, where the uncertainties of expectations are modeled by unknown nonlinear but quadratically constrained deterministic functions. Cost-guaranteeing Nash strategies are defined for fiscal and monetary policy as two players. The model is suitable for comparative analysis of the development paths of catching-up economies. Specifically, we evaluate nine possible development paths for the Hungarian economy, where each path is characterised by a proxy for the debt-to-GDP ratio.

Wojciech Olszewski, Yutong Zhang

When customers must visit a seller to learn the valuation of its product, sellers potentially benefit from charging a lower price on the first visit and a higher price when a buyer returns. Armstrong and Zhou (2016) show that such price discrimination can arise in equilibrium when buyers learn a seller's pricing policy only upon visiting. We depart from this assumption by supposing that sellers commit to observable pricing policies that guide consumer search and buyers can choose whom to visit first. We show that no seller engages in price discrimination in equilibrium.

Lucas Pahl, Carlos Pimienta

We prove the 2-player, generic extensive-form case of the conjecture of Govindan and Wilson (1997a,b) and Hauk and Hurkens (2002) stating that an equilibrium component is essential in every equivalent game if and only if the index of the component is nonzero. This provides an index-theoretic characterization of the concept of hyperstable components of equilibria in generic extensive-form games, first formulated by Kohlberg and Mertens (1986). We also illustrate how to compute hyperstable equilibria in multiple economically relevant examples and show how the predictions of hyperstability compare with other solution concepts.

Oguzhan Celebi, Joel Flynn

How should authorities that care about match quality and diversity allocate resources when they are uncertain about the market? We introduce adaptive priority mechanisms (APM) that prioritize agents based on both their scores and characteristics. We derive an APM that is optimal and show that the ubiquitous priority and quota mechanisms are optimal if and only if the authority is risk-neutral or extremely risk-averse over diversity, respectively. With many authorities, each authority using the optimal APM is dominant and implements the unique stable matching. Using Chicago Public Schools data, we find that the gains from adopting APM may be considerable.

Luis Alcala

This paper studies a discrete-time version of the Lucas-Uzawa endogenous growth model with physical and human capital in the presence of externalities. Existence of an optimal equilibrium is proved using tools from dynamic programming with bounded or unbounded returns. The proofs also rely on properties of isoelastic utility and homogeneous production functions and apply well-known inequalities in real analysis, seldom used in the literature, which significantly simplify the task of verifying certain assumptions that are rather technical in nature. Some advantages of adopting a parametric family of isoelastic utility functions, instead of the ad hoc formulation typically used, are also discussed.

Nicholas Wu

How can one efficiently share payoffs with collaborators when participating in risky research? First, I show that efficiency can be achieved by allocating payoffs asymmetrically between the researcher who makes a breakthrough ("winner") and the others, even if agents cannot observe others' effort. When the winner's identity is non-contractible, allocating credit based on effort at time of breakthrough also suffices to achieve efficiency; so the terminal effort profile, rather than the full history of effort, is a sufficient statistic. These findings suggest that simple mechanisms using minimal information are robust and effective in addressing inefficiencies in strategic experimentation.

Jorge Alcalde-Unzu, Oihane Gallo, Elena Inarra et al.

Agents may form coalitions. Each coalition shares its endowment among its agents by applying a sharing rule. The sharing rule induces a coalition formation problem by assuming that agents rank coalitions according to the allocation they obtain in the corresponding sharing problem. We characterize the sharing rules that induce a class of stable coalition formation problems as those that satisfy a natural axiom that formalizes the principle of solidarity. Thus, solidarity becomes a sufficient condition to achieve stability.

Samidh Pal

This study delves into the origins of excess capacity by examining the reactions of capital, labor, and capital intensity. To achieve this, we have employed a novel three-layered production function model, estimating the elasticity of substitution between capital and labor as a nested layer, alongside capital intensity, for all industry groups. We have then selectively analyzed a few industry groups for comparative purposes, taking into account the current government policies and manufacturing plant realities. Ultimately, we recommend that policymakers address the issue of excess capacity by stimulating the expansion of manufacturing plants with cutting-edge machinery. Our findings and recommendations are intended to appeal to academics and policymakers alike.

Mark Whitmeyer

An updating rule specifies how an agent reacts to information. An updating rule is Blackwell monotone if more information is always better for an agent in a decision problem and strictly Blackwell monotone if, in addition, there is always a decision problem in which more information is strictly better for an agent. Bayes' law is strictly Blackwell monotone, and I show that within a broad class of updating rules--those that distort the Bayesian posteriors in a signal-independent manner--it is the only strictly Blackwell-monotone updating rule. Moreover, when the state is non-binary, I show that Bayes' law and the trivial updating rule in which an agent dogmatically holds a single belief are the only continuous Blackwell-monotone updating rules.

Yangfan Zhou

I study collective dynamic information acquisition. Players decide when to stop sequential sampling via a collective stopping rule, which specifies decisive coalitions that can terminate information acquisition upon agreement. I develop a methodology to characterize equilibria using an ex ante perspective. Instead of stopping strategies, players choose distributions over posterior beliefs subject to majorization constraints. Equilibrium sampling regions are characterized via a fixed-point argument based on concavification. Collective sampling generates learning inefficiencies and having more decisive coalitions typically reduces learning. I apply the model to committee search and competition in persuasion.

Jose M. Betancourt

The dynamics of network formation are generally very complex, making the study of distributions over the space of networks often intractable. Under a condition called conservativeness, I show that the stationary distribution of a network formation process can be found in closed form, and is given by a Gibbs measure. For conservative processes, the stationary distribution of a certain class of models can be characterized for an arbitrarily large number of players. In this limit, the statistical properties of the model can exhibit phase transitions: discontinuous changes as a response to continuous changes in model parameters.

Xiaoxiao Hu, Haoran Lei

We analyze the optimal delegation problem between a principal and an agent, assuming that the latter has state-independent preferences. We demonstrate that if the principal is more risk-averse than the agent toward non-status quo options, an optimal mechanism is a {\em veto mechanism}. In a veto mechanism, the principal uses veto (i.e., maintaining the status quo) to balance the agent's incentives and does not randomize among non-status quo options. We characterize the optimal veto mechanism in a one-dimensional setting. In the solution, the principal uses veto only when the state surpasses a critical threshold.

Christoph Kuzmics, Brian W. Rogers, Xiannong Zhang

The 1961 Ellsberg paradox is typically seen as an empirical challenge to the subjective expected utility framework. Experiments based on Ellsberg's design have spawned a variety of new approaches, culminating in a new paradigm represented by, now classical, models of ambiguity aversion. We design and implement a decision-theoretic lab experiment that is extremely close to the original Ellsberg design and in which, empirically, subjects make choices very similar to those in the Ellsberg experiments. In our environment, however, these choices cannot be rationalized by any of the classical models of ambiguity aversion.

Michele Crescenzi

We provide a syntactic construction of correlated equilibrium. For any finite game, we study how players coordinate their play on a signal by means of a public strategy whose instructions are expressed in some natural language. Language can be ambiguous in that different players may assign different truth values to the very same formula in the same state of the world. We model ambiguity using the player-dependent logic of Halpern and Kets (2015). We show that, absent any ambiguity, self-enforcing coordination always induces a correlated equilibrium of the underlying game. When language ambiguity is allowed, self-enforcing coordination strategies induce subjective correlated equilibria.

Qi-Qing Song, Min Guo

This gives two existence results of alpha-core solutions by introducing P-open conditions and strong P-open conditions into games without ordered preferences. The existence of alpha-core solutions is obtained for games with infinite-players. Secondly, it provides a short proof of Kajii's (Journal of Economic Theory 56, 194-205, 1992) existence theorem for alpha-core solutions, further, the Kajii's theorem is equivalent to the Browder fixed point theorem. In addition, the obtained existence results can include many typical results for alpha-core solutions and some recent existence results as special cases.

Gregorio Curello

Agents exert hidden effort to produce randomly-sized innovations in a technology they share. Flow payoffs grow as the technology develops, but so does the marginal cost of effort. I characterise the unique symmetric MPE with the quality of the technology as the state variable. In this equilibrium, continuation payoffs may fall after an innovation. I show that this occurs (with positive probability) if the number of agents is sufficiently large. Allowing agents to discard innovations induces higher effort at all states in the symmetric MPE (which remains unique). Ex-ante payoffs are higher as well and, under natural conditions, they exceed those of all equilibria without disposal.