|
on Economic Design |
| By: | Stephan Lauermann (The University of Bonn, Department of Economics); Asher Wolinsky (Northwestern University, Department of Economics) |
| Abstract: | Auction models are convenient abstractions of informal price-formation processes that arise in markets for assets or services. These processes involve frictions such as bidder recruitment costs for sellers, participation costs for bidders, and limitations on sellers' commitment abilities. This paper develops an auction model that captures such frictions. We derive several novel predictions; in particular, we find that outcomes are often inefficient, and the market sometimes unravels. |
| Keywords: | Auctions |
| JEL: | D44 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:288&r=des |
| By: | Hikmet Gunay (Department of Economics University of Manitoba, Canada.); Ricardo Huamán-Aguilar (Departamento de Economía de la Pontificia Universidad Católica del Perú.) |
| Abstract: | In a second-price sequential auction with global and local bidders, we analyze the correct selling order of goods when the number of bidders in each leg of the auction is different with laboratory experiments. Theoretically, selling the good with a large number of bidders last should generate an (almost) efficient outcome but selling it first should result in an inefficient outcome with a positive probability. Our experimental results show that selling that good last generates a more efficient outcome than selling it first. Hence, the experimental results show that the selling order has to be taken into account while designing a sequential auction. JEL Classification-JE: C90, C91, C92, D44. |
| Keywords: | Experimental economics, Lab experiments, Sequential auctions, Auction theory. |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:pcp:pucwps:wp00530&r=des |
| By: | Elacqua, Gregory; Kutscher, Macarena |
| Abstract: | In this paper, we aim to understand some of the mechanisms behind the low impact of a Chilean educational reform on socioeconomic integration within the school system. We focus on pre-kindergarden (pre-K) admissions, which account for the highest volume of applications since all students (except those applying to private schools) must seek admission through the centralized system. We employ a discrete choice model to analyze parents school preferences. Our analysis reveals that the school choices of low-SES families are more strongly influenced by a schools non-academic attributes which are often omitted from analyses of parental preferences due to data availability constraints rather than academic quality. For instance, low-SES parents tend to prefer schools with fewer reported violent incidents, schools where students report facing less discrimination and exclusion, and schools where students demonstrate higher levels of self-efficacy. Disadvantaged families also tend to favor schools that have a religious affiliation, offer more ”classical” sports (e.g. soccer), or have a foreign name. These results have significant implications for understanding the preferences of disadvantaged families and the impact of centralized admission systems on reducing segregation. By recognizing the non-academic factors driving school choices, policymakers can better design admission systems that truly foster school diversity and equality. |
| Keywords: | school choice;Centralized Assignment Systems;Segregation |
| JEL: | A20 D12 I24 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:13340&r=des |
| By: | Elacqua, Gregory; Figueroa, Nicolas; Fontaine, Andrés; Margitic, Juan Francisco; Méndez, Carolina |
| Abstract: | Due to an unprecedented rise in demand, in 2020 the Peruvian Ministry of Education implemented a centralized assignment mechanism that allowed thousands of students at various levels of education to move from the private to the public sector. In this paper, we empirically explore the determinants of accepting a public school assignment and, subsequently, remaining in the public system. Specifically, we exploit the randomness in the assignment of students to new public schools to causally estimate the influence of distance on the decision to accept a public school placement, and we explore its role in the decision to remain there. We also provide insights into various determinants of parental preferences. Our findings reveal that families care about distance from home to the assigned public school as well as the relative academic and peer quality with respect to their school of origin. Parents weigh these factors differently based on their familiarity with them. Consequently, experiencing a new school environment can alter the significance of specific attributes when it comes time to decide whether to stay at the assigned school. These findings offer valuable insights into how governments can strengthen the supply of public schooling. |
| Keywords: | Centralized Assignment Systems;private-public schooling;COVID-19;school choice |
| JEL: | A20 D12 D83 I28 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:13353&r=des |
| By: | Jay Pil Choi (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - 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); Doh-Shin Jeon (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - 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) |
| Abstract: | We investigate how platform market power affects platforms' design choices in ad-funded two-sided markets, where platforms may find it optimal to charge zero price on the consumer side and extract surplus on the advertising side. We consider design choices affecting both sides in opposite ways and compare private incentives with social incentives. Platforms' design biases depend crucially on whether they can charge any price on the consumer side. We apply the framework to technology adoption, privacy, and ad load choices. Our results provide a rationale for a tougher competition policy to curb market power of ad-funded platforms with free services. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04470490&r=des |
| By: | Halaburda, Hanna (New York U); He, Zhiguo (U of Chicago); Li, Jiasun (George Mason U) |
| Abstract: | The designs of many new blockchains are inspired by the Byzantine fault tolerance (BFT) problem. While traditional BFT protocols assume most system nodes behave honestly, we recognize that blockchains are deployed in environments where nodes are subject to strategic incentives. This paper thus develops an economic framework for analyzing distributed consensus formation with explicit incentive considerations. We formalize the consensus formation process in a dynamic game with imperfect information and preplay communication where non-Byzantine nodes are Knightian uncertain about Byzantine actions, and characterize all of its symmetric equilibria. Our findings enrich those from traditional BFT algorithms, offer guidance for designing blockchains in trustless environments, and also provide a theoretical framework bridging distributed consensus and game theoretical modeling. |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:4137&r=des |
| By: | Qiuyu Lu; Noriaki Matsushima; Shiva Shekhar |
| Abstract: | This study explores the welfare impact of personalized pricing for consumers in a duopolistic two-sided market, with consumers single-homing and developers affiliating with a platform according to their outside option. Personalized pricing, which is private in nature, cannot influence expectations regarding the network sizes, inducing the platforms to offer lower participation fees for developers. Those lower fees increase network benefits for consumers, allowing the platforms to exploit these benefits through personalized pricing. Personalized prices are higher when the network value for developers is high, benefiting competing platforms at the expense of consumers. These findings offer policy insights on personalized pricing. |
| Keywords: | personalized pricing, uniform prices, two-sided market, content developers |
| JEL: | L13 D43 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10994&r=des |