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on Economic Design |
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Issue of 2023‒03‒13
five papers chosen by Guillaume Haeringer, Baruch College and Alex Teytelboym, University of Oxford |
| By: | Hirata, Daisuke; 平田, 大祐; Kasuya, Yusuke; 糟谷, 祐介; Okumura, Yasunori; 奥村, 保規 |
| JEL: | C78 D47 |
| Date: | 2023–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:hit:econdp:2023-01&r=des |
| By: | Julien Combe (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] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique - Inria Saclay - Ile de France - Inria - Institut National de Recherche en Informatique et en Automatique - IP Paris - Institut Polytechnique de Paris - Criteo AI Lab - Criteo [Paris], IP Paris - Institut Polytechnique de Paris, CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique, X - École polytechnique) |
| Abstract: | We investigate the problem of reallocation with priorities where one has to assign objects or positions to individuals. Agents can have an initial ownership over an object. Each object has a priority ordering over the agents. In this framework, there is no mechanism that is both individually rational (IR) and stable, i.e. has no blocking pairs. Given this impossibility, an alternative approach is to compare mechanisms based on the blocking pairs they generate. A mechanism has minimal envy within a set of mechanisms if there is no other mechanism in the set that always leads to a set of blocking pairs included in the one of the former mechanism. Our main result shows that the modified Deferred Acceptance mechanism (Guillen and Kesten in Int Econ Rev 53(3):1027–1046, 2012), is a minimal envy mechanism in the set of IR and strategy-proof mechanisms. We also show that an extension of the Top Trading Cycle (Karakaya et al. in J Econ Theory 184:104948, 2019) mechanism is a minimal envy mechanism in the set of IR, strategy-proof and Pareto-efficient mechanisms. These two results extend the existing ones in school choice. |
| Keywords: | JEL Classification: C78 D47 D63 Matching Reallocation with priorities Minimal envy mechanisms, JEL Classification: C78, D47, D63 Matching, Reallocation with priorities, Minimal envy mechanisms |
| Date: | 2022–02–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03951678&r=des |
| By: | Daniil Larionov |
| Abstract: | I consider a repeated auction setting with colluding buyers and a seller who adjusts reserve prices over time without long-term commitment. To model the seller’s concern for collusion, I introduce a new equilibrium concept: collusive public perfect equilibrium (cPPE). For every strategy of the seller I define the corresponding “buyer-game†in which the seller is replaced by Nature who chooses the reserve prices for the buyers in accordance with the seller’s strategy. A public perfect equilibrium is collusive if the buyers cannot achieve a higher symmetric public perfect equilibrium payoff in the corresponding buyer-game. In a setting with symmetric buyers with private binary iid valuations and publicly revealed bids, I find a collusive public perfect equilibrium that allows the seller to extract the entire surplus from the buyers in the limit as the discount factor goes to 1. I therefore show that a patient, non-committed seller can effectively fight collusion even when she can only set reserve prices and has to satisfy stringent public disclosure requirements. |
| Keywords: | Repeated Auctions, Auction Design, Collusion, Full Surplus Extraction |
| JEL: | D44 D47 C73 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2023_392&r=des |
| By: | David K Levine; Andrea Mattozzi; Salvatore Modica |
| Date: | 2023–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levarc:786969000000001811&r=des |
| By: | Ronen Gradwohl; Moshe Tennenholtz |
| Abstract: | We study the costs and benefits of selling data to a competitor. Although selling all consumers' data may decrease total firm profits, there exist other selling mechanisms -- in which only some consumers' data is sold -- that render both firms better off. We identify the profit-maximizing mechanism, and show that the benefit to firms comes at a cost to consumers. We then construct Pareto-improving mechanisms, in which each consumers' welfare, as well as both firms' profits, increase. Finally, we show that consumer opt-in can serve as an instrument to induce firms to choose a Pareto-improving mechanism over a profit-maximizing one. |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2302.00285&r=des |