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on Microeconomics |
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Issue of 2011‒07‒13
seventeen papers chosen by Jing-Yuan Chiou IMT Lucca Institute for Advanced Studies |
| By: | Andrea Attar (Faculty of Economics, University of Rome "Tor Vergata"); Eloisa Campioni (Faculty of Economics, University of Rome "Tor Vergata"); Gwenael Piaser (IPAG Business School, Paris;) |
| Abstract: | We consider multiple-principal multiple-agent games of incomplete information. In this context, we identify a class of direct and incentive compatible mechanisms: each principal privately recommends to each agent to reveal her private information to the other principals, and each agent behaves truthfully. We show that there is a rationale in restricting attention to this class of mechanisms: if all principals make use of direct incentive compatible mechanisms, there are no incentives to unilaterally deviate towards more sophisticated mechanisms. We develop two examples to show that private recommendations are a key element of our construction, and that the restriction to direct incentive compatible mechanisms is not sufficient to provide a complete characterization of equilibria. |
| Keywords: | Incomplete information, competing mechanisms, information revelation |
| JEL: | D82 |
| Date: | 2011–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:205&r=mic |
| By: | Pérez-Nievas, Mikel |
| Abstract: | In this paper. I characterize the set of Bayesian incentive compatible anonymous mechanisms in a discrete public good problem when preferences are private information. With this result in hand, I characterize the set of interim incentive efficient mechanisms as voting schemes in which votes are weighted according to the tax paid by each agent. |
| Keywords: | Public goods; Voting mechanisms; Interim efficiency; |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/7221&r=mic |
| By: | Andrea Attar (Faculty of Economics, University of Rome "Tor Vergata"); Eloisa Campioni (Faculty of Economics, University of Rome "Tor Vergata"); Gwenael Piaser (IPAG Business School, Paris;) |
| Abstract: | We consider multiple-principal multiple-agent games of incomplete information in which each agent can at most participate with one principal. In such contexts, we show that the restriction to direct truthful mechanisms involves a loss of generality, even if one only focuses on pure strategy equilibria. However, the traditional Revelation Principle retains its power in games with a single agent. |
| Keywords: | Competing Mechanisms, Exclusivity |
| JEL: | D82 |
| Date: | 2011–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:201&r=mic |
| By: | Pérez-Nievas, Mikel |
| Abstract: | In this paper, I characterize the set of interim incentive efficient allocation mechanisms for a broad class of problems with private information, which includes those associated with the provision of public goods (with or without exclusion) as well as the allocation of one or more units of a private good. |
| Keywords: | Incomplete information; Interim efficiency; Pooling of types; |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/7220&r=mic |
| By: | Wooders, John |
| Abstract: | We show that a profit maximizing monopolistic intermediary may behave approximately like a Walrasian auctioneer setting bid and ask prices nearly equal to Walrasian equilibrium prices. In the model agents trade either through the intermediary or privately. Buyers (sellers) choosing to trade through the intermediary potentially trade immediately at the ask (bid) price, but sacrifice the spread as potential gains. Agents trading privately capture all of the gains to trade, but risk costly delay in finding a partner. We show that when the cost of delay is small, the intermediary sets bid and ask prices nearly equal to Walrasian equilibrium prices. As the cost of delay vanishes, the equilibrium bid and ask prices converge to the Walrasian equilibrium prices. If the possibility of trading through the intermediary is removed, and therefore all trade takes place in the private trading market, then prices are not close to Walrasian equilibrium prices even as the cost of delay vanishes. |
| Keywords: | Intermediation; Walrasian equilibrium; Matching; Bargaining; |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/2981&r=mic |
| By: | M. Casari; J. Zhang; C. Jackson |
| Abstract: | It is still an open question when groups will perform better than individuals in intellectual tasks. We report that in a company takeover experiment, groups placed better bids than individuals and substantially reduced the winner’s curse. This improvement was mostly due to peer pressure over the minority opinion and to group learning. Learning took place from interacting and negotiating consensus with others, not simply from observing their bids. When there was disagreement within a group, what prevailed was not the best proposal but the one of the majority. Groups underperformed with respect to a “truth wins” benchmark although they outperformed individuals deciding in isolation. |
| JEL: | C91 C92 D81 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp763&r=mic |
| By: | Koch, Alexander K. (University of Aarhus); Nafziger, Julia (University of Aarhus) |
| Abstract: | We model how people formulate and evaluate goals to overcome self-control problems. People often attempt to regulate their behavior by evaluating goal-related outcomes separately (in narrow psychological accounts) rather than jointly (in a broad account). To explain this evidence, our theory of endogenous narrow or broad psychological accounts combines insights from the literatures on goals and mental accounting with models of expectations-based reference-dependent preferences. By formulating goals the individual creates expectations that induce reference points for task outcomes. These goal-induced reference points make substandard performance psychologically painful and motivate the individual to stick to his goals. How strong the commitment to goals is depends on the type of psychological account. We provide conditions when it is optimal to evaluate goals in narrow accounts. The key intuition is that broad accounts make decisions or risks in different tasks substitutes and thereby create incentives to deviate from goals. Model extensions explore the robustness of our results to different timing assumptions and goal and account revision. |
| Keywords: | quasi-hyperbolic discounting, reference-dependent preferences, loss aversion, self-control, mental accounting, goals |
| JEL: | A12 C70 D81 D91 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5802&r=mic |
| By: | Xu, Yongsheng; Yoshihara, Naoki |
| Abstract: | This paper studies the Nash solution to nonconvex bargaining problems. The Nash solution in such a context is typically multi-valued. We introduce a procedure to exclude some options recommended by the Nash solution. The procedure is based on the idea of the Kalai-Smorodinsky solution which has the same informational requirement on individual utilities as the Nash solution does and has an equity consideration as well. We then use this procedure to introduce two new solutions to nonconvex bargaining problems and study them axiomatically. |
| JEL: | C71 C78 D6 D7 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hituec:552&r=mic |
| By: | Francesco De Sinopoli; Giovanna Iannantuoni |
| Abstract: | We present a simple voting environment where the Condorcet winner exists. Under plurality rule, the derived game has a stable set where such a candidate is elected with probability one. However, no stable set of the approval game elects the Condorcet winner with positive probability. |
| Keywords: | Approval voting, Plurality voting, Sophisticated voting,Mertens Stability. |
| JEL: | C72 D72 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:210&r=mic |
| By: | Pivato, Marcus |
| Abstract: | Let X be a set of social alternatives, and let V be a set of `votes' or `signals'. (We do not assume any structure on X or V). A `variable population voting rule' F takes any number of anonymous votes drawn from V as input, and produces a nonempty subset of X as output. The rule F satisfies `reinforcement' if, whenever two disjoint sets of voters independently select some subset Y of X, the union of these two sets will also select Y. We show that F satisfies reinforcement if and only if F is a `balance rule'. If F satisfies a form of neutrality, then F is satisfies reinforcement if and only if F is a scoring rule (with scores taking values in an abstract linearly ordered abelian group R); this generalizes a result of Myerson (1995). We also discuss the sense in which the balance or scoring representation of F is unique. Finally, we provide a characterization of two scoring rules: `formally utilitarian' voting and `range voting'. a |
| Keywords: | reinforcement; scoring rule; balance rule; linearly ordered abelian group; formal utilitarian; range voting |
| JEL: | D71 |
| Date: | 2011–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31896&r=mic |
| By: | Rendón, Silvio |
| Abstract: | This paper analyzes the problem of matching heterogenous agents in a Bayesian learning model. One agent gives a noisy signal to another agent, who is responsible for learning. If production has a strong informational component, a phase of cross-matching occurs, so that agents of low knowledge catch up with those of higher one. It is shown that (i) a greater informational component in production makes cross-matching more likely; (ii) as the new technology is mastered, production becomes relatively more physical and less informational; (iii) a greater dispersion of the ability to learn and transfer information makes self-matching more likely; and (iv) self-matching leads to more self-matching, whereas croos-matching can make less productive agents overtake more productive ones. |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/268&r=mic |
| By: | Corcho Sánchez, Paula I. |
| Abstract: | This paper analyzes two specific economic problems: The division of profits between associated firms and the distribution of cost of a public good. We tackle these problems using game theoretic techniques. To do so, a new c1ass of games in characteristic function form, called Generalizad Externality Games is defined in this paper. Sorne attractive features of this c1ass of games are that the core is non-empty and that these new games there seems to be a connection with relational goods. |
| Keywords: | Cooperative Games; Balanced Games; Core; Coob-Douglas Production; Public Goods; Relations Goods; |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/3979&r=mic |
| By: | Dhillon, Amrita |
| Abstract: | This paper introduces the 'Extended Pareto' axiom on Social welfare functions and gives a characterization of the axiom when it is assumed that the Social Welfare Functions that satisfy it in a framework of preferences over lotteries also satisfy the restrictions (on the domain and range of preferences) implied by the von-Neumann-Morgenstern axioms. With the addition of two other axioms: Anonymity and Weak IIA* it is shown that there is a unique Social Welfare Function called Relative Utilitarianism that consists of normalizing individual utilities between zero and one and then adding them. |
| Keywords: | Group Preferences; Multi-profile; |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/3912&r=mic |
| By: | Serrano, Roberto; Vohra, Rajiv |
| Abstract: | A core allocation of a complete information economy can be characterized as one that would not be unanimously rejected in favor of another feasible alternative by any coalition. We use this test of coalitional voting in an incomplete information environment to formalize a notion of resilience. Since information transmission is implicit in the Bayesian equilibria of such voting games, this approach makes it possible to derive core concepts in which the transmission of information among members of a coalition is endogenous. Our results lend support to the credible core of Dutta and Vohra [4] and the core proposed by Myerson [11] as two that can be justified in terms of coalitional voting |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/354&r=mic |
| By: | Ben-El-Mechaiekh, H.; Chebbi, S.; Florenzano, M.; Llinares, J.V. |
| Abstract: | The purpose of this paper is to extend Himmelberg's fixed point theorem replacing the usual convexity in topological vector spaces by an abstract topological notion of convexity which generalizes classical convexity as well as several metric convexity structures found in the literature. We prove the existence, under weak hypotheses, of a fixed point for a compact approachable map and we provide sufficient conditions under which this result applies to maps whose values are convex in the abstract sense mentionned above. |
| Keywords: | Fixed point theorems; Generalized convexity; Compact correspondences; Approachable correspondences; |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/6022&r=mic |
| By: | James C. Cox; Vjollca Sadiraj |
| Abstract: | Theories of decision under risk that challenge expected utility theory model risk attitudes at least partly with transformation of probabilities. We explain how attributing risk aversion (partly or wholly) to attitude towards probabilities, can produce extreme probability distortions that imply paradoxical risk aversion. |
| Keywords: | risk aversion, probability transformation, calibration, reference dependence, loss aversion |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:exc:wpaper:2011-10&r=mic |
| By: | Peleg, Bezalel (Institute of Mathematics and Center for the Study of Rationality); Sudhölter, Peter (Department of Business and Economics); Zarzuelo, José M. (Faculty of Economics and Business Administration) |
| Abstract: | On several classes of n-person NTU games that have at least one Shapley NTU value, Aumann characterized this solution by six axioms: Non-emptiness, efficiency, unanimity, scale covariance, conditional additivity, and independence of irrelevant alternatives (IIA). Each of the first five axioms is logically independent of the remaining axioms, and the logical independence of IIA is an open problem. We show that for n = 2 the first five axioms already characterize the Shapley NTU value, provided that the class of games is not further restricted. Moreover, we present an example of a solution that satisfies the first 5 axioms and violates IIA for 2-person NTU games (N,V) with uniformly p-smooth V(N). |
| Keywords: | NTU game; Shapley NTU value; positive smoothness |
| JEL: | C71 |
| Date: | 2010–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sdueko:2010_006&r=mic |