Download or read book Essays in mechanism and market design written by Vasiliki Skreta and published by . This book was released on 2001 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays in Mechanism and Market Design written by Kentaro Tomoeda and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis consists of three essays on mechanism and market design.

Download or read book Essays on Market Design written by Shunya Noda and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis consists of four essays on mechanism and market design. The first essay studies mechanism design in dynamic environments and establishes a sufficient condition for full surplus extraction and implementation. The second essay studies information acquisition in a matching problem and considers optimal information design. The third and fourth essays study the matching size in the assignment problems. The third essay characterizes the upperbound of the matching size achieved by the random serial dictatorship mechanism. The fourth essay shows that (i) the standard mechanism fails to achieve a large matching size when we have generalized constraints on the set of feasible matchings, and (ii) the alternative mechanism we propose always generate a large matching.

Download or read book Essays on Market Design and Experimental Economics written by Eric Samuel Mayefsky and published by Stanford University. This book was released on 2011 with total page 106 pages. Available in PDF, EPUB and Kindle. Book excerpt: I explore fundamental behavioral aspects of several market design environments in a variety of projects using both theoretical models and laboratory experiments. I show that human tendencies can drastically shift potential outcomes away from those which would result if individuals were fully 'rational' and unbiased in decision problems similar to those found frequently in the field. I explore two common classes of centralized matching mechanisms--Deferred Acceptance and Priority--which have wildly different success rates in practice despite both being open to manipulation by agents who have incomplete information about the other participants in the match. For this reason, theory predicts both mechanisms in equilibrium will yield match outcomes which are unstable, meaning some agents will desire to renegotiate with one another after receiving their match assignments, and thus reduce participants' confidence in using the match. I provide laboratory evidence that out-of-equilibrium truth telling by agents is substantially more frequent in the Deferred Acceptance environment and thus Deferred Acceptance matches will generally be more stable in practice than matches using a Priority mechanism. This may explain why Deferred Acceptance mechanisms appear to be more viable in the field. I also explore two different models of decentralized two-sided matching environments where establishing scarce signaling methods can improve market outcomes. In a laboratory experiment, I show that allowing potential receiving job offers to send a single signal to their favorite potential employer before job offers are made increases overall match rates in the market, but is potentially damaging to the firms making offers when compared to the market without such a signal. Then, in a theoretical model where pre-offer communication takes the form of an interview process where workers have natural limits on the number of interviews in which they can participate, I show that in many cases firms can benefit themselves and the market as a whole by voluntarily restricting the number of interviews they offer to participate in. While not traditionally thought of as market design problems, voting mechanisms are fundamentally goods allocation problems as well and have many of the same issues as traditional markets do. I explore the effects of voter bias on outcomes in an otherwise standard voting model and find that even slight external pressure on individuals in a committee tasked with coming to a collective decision can destroy the ability of that committee to arrive at the correct result, even when individuals have good information about the best decision to make. Furthermore, the quality of the decision made by such a committee can actually degrade as the committee size increases, in contrast with the canonical Condorcet Jury Theorem which predicts that a committee's ability to choose the right outcome increases quickly as more members are added.

Download or read book Essays in Market and Mechanism Design written by Fanqi Shi and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation demonstrates three works to understand how specific markets work and how we can devise the rules to improve market outcome. Chapter 1 studies a two-period matching model where one side of the market (e.g. workers) have an option to invest and delay matching in the first period. Chapter 2 explores the optimal ordering of heterogeneous items in sequential auctions with unit-demand buyers. Chapter 3 analyzes the optimal ``screening'' mechanism of products with network externalities.

Download or read book Essays on mechanism design in two sided markets written by and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Mechanism and Market Design written by Aaron Luke Bodoh-Creed and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The focus of this dissertation is the role of information in the determination of market outcomes. The first essay provides a novel framework for studying large market mechanisms with an application to the information aggregation properties of uniform price auctions. The second essay analyzes a model of mood and associative memory and shows that this bias could explain anomalous results in the behavioral finance and organizational behavior literatures. The third and final essay analyzes ambiguity aversion and how it affects outcomes in general mechanisms. The first essay, "Mean Field Approximation of Large Games, " provides a general framework for approximating the equilibria of games with many participants using analytically tractable nonatomic limit games. We prove that if the game is continuous, then the set of equilibria is upper hemicontinuous in the number of agents. This implies that we can use equilibrium strategies of the limit game as an approximation of the equilibrium actions of the agents in the large finite game. We argue that this continuity property implies that generic large, continuous markets are almost competitive in the limit. We use our framework to analyze multi-unit demand uniform price auctions with both a common value component and bidders who value successive units as complements. We show that these auctions fully reveal the state of the world asymptotically and result in ex post efficient allocations with arbitrarily high probability in the asymptotic limit. As a second application, we provide a framework for approximating large stochastic games using dynamic competitive equilibria with applications to macroeconomics, industrial organization, engineering and computer science. The second essay, "Mood and Associative Memory, " examines the biases in memory caused by an agent's affective state. Within the psychology literature, it is a well established fact that decision makers in a positive emotional state are optimistic about the odds of positive random events and agents in a negative emotional state are pessimistic. By building a mathematical model firmly grounded on psychological primitives, we develop a behavioral decision theory framework that can be utilized in a wide range of microeconomic models. We apply our model to study employee morale and clarify a severely conflicted literature on morale within the Organizational Behavior literature. We also show that biases in memory are a potential explanation for a wide range of asset pricing anomalies such as excess volatility, short run underreaction and long run overreaction to news, and the influence of non-fundamental events. Our model provides a tool for policy makers to analyze the effects of biases in memory on the response of agents to firms, markets, and government policies and can be used to identify situations in which either public or private intervention may be required to ameliorate the effects of the agents' errors in judgment. The third and final essay, "Ambiguous Beliefs and Mechanism Design, " explores the effects of ambiguity aversion, also known as Knightian Uncertainty, on mechanism design theory. Knightian uncertainty refers to risk within the economy that is not characterized by a stochastic process commonly known to the agents. Compelling psychological data, such as the classical Ellsberg Paradox, have shown that agents reveal a strong aversion to Knightian Uncertainty above and beyond the risk aversion considered in neoclassical microeconomic theory. Policy makers ought to be especially concerned about the effects of ambiguity aversion, neglected in traditional studies of mechanism and market design, in situations where the agents are unfamiliar with the mechanism and the economic environment the mechanism creates. We unify the Multiple Prior Expected Utility (MEU) model of ambiguity aversion with the tools of contract theory to provide a general framework to analyze the effects of ambiguity aversion in market settings and use these tools to assess the effect of ambiguity aversion on auctions and bargaining problems. We show that the first and second price auction cannot be ranked when the agents are ambiguity averse, derive the optimal auction format, and study the effects of ambiguity on auction entry. We also prove that ambiguity aversion can be efficiency enhancing in ex ante budget balanced mechanisms and revenue enhancing in ex post efficient bargaining mechanisms.

Download or read book Essays in Mechanism Design and Market Design written by and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Full Implementation and Belief Restrictions' considers how information about agents' beliefs might be used to achieve full implementation, which aims to resolve the problem of multiplicity in mechanism design. We find that minimal knowledge about beliefs (described by moment conditions) can be used to reduce strategic externalities induced by the incentive compatible transfers by adding belief-based adjustments to the transfers. When strategic externalities are reduced to the extent that the best reply map becomes contractive, then uniqueness is achieved for a Delta-Rationalizability. We further show that (1) this result often obtains by very little information about agents' beliefs, therefore the uniqueness result holds for a large class of beliefs and (2) suitable moment conditions can be found in many economically interesting information structures, for example in quadratic smooth environments with independent or affiliated types. `Shared Information Sources in Exchanges' explores implications of heterogeneous information sources available to market participants -- due to regulation, choice or comes as a constraint. Traders in financial markets recognize that shared forecast services, differential access to information technology, targeted advertisement induce correlation in inference errors. We show that common information sources, seen as a departure from the private information acquisition assumption, qualitatively affect information aggregation and efficiency properties of markets. Even when traders' values are independent, inference from prices can be useful for learning about valuations. From a market design perspective, we show that imposing differential access to sources can improve informativeness, restricting participation to certain trading venues can be optimal. `Privacy-Preserving Market Design' is motivated by the increasing concern about revealing information on past trades, income, liquidity needs. With improved data collection, preserving privacy has become a de facto participation constraint in exchanges. We suggest an incentive-based approach by formulating a mechanism design problem to study the joint design of the allocation rule, bidding language, observable outcomes (prices, quantities at various levels of aggregation, and other statistics). We show that privacy-preserving market design is feasible, in that the publicly observable outcome is minimally informative about private information. In contrast to the view in the literature, there need not be a trade-off between privacy preservation and efficiency.

Download or read book Essays on Market Design and Experimental Economics written by Eric Samuel Mayefsky and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: I explore fundamental behavioral aspects of several market design environments in a variety of projects using both theoretical models and laboratory experiments. I show that human tendencies can drastically shift potential outcomes away from those which would result if individuals were fully 'rational' and unbiased in decision problems similar to those found frequently in the field. I explore two common classes of centralized matching mechanisms--Deferred Acceptance and Priority--which have wildly different success rates in practice despite both being open to manipulation by agents who have incomplete information about the other participants in the match. For this reason, theory predicts both mechanisms in equilibrium will yield match outcomes which are unstable, meaning some agents will desire to renegotiate with one another after receiving their match assignments, and thus reduce participants' confidence in using the match. I provide laboratory evidence that out-of-equilibrium truth telling by agents is substantially more frequent in the Deferred Acceptance environment and thus Deferred Acceptance matches will generally be more stable in practice than matches using a Priority mechanism. This may explain why Deferred Acceptance mechanisms appear to be more viable in the field. I also explore two different models of decentralized two-sided matching environments where establishing scarce signaling methods can improve market outcomes. In a laboratory experiment, I show that allowing potential receiving job offers to send a single signal to their favorite potential employer before job offers are made increases overall match rates in the market, but is potentially damaging to the firms making offers when compared to the market without such a signal. Then, in a theoretical model where pre-offer communication takes the form of an interview process where workers have natural limits on the number of interviews in which they can participate, I show that in many cases firms can benefit themselves and the market as a whole by voluntarily restricting the number of interviews they offer to participate in. While not traditionally thought of as market design problems, voting mechanisms are fundamentally goods allocation problems as well and have many of the same issues as traditional markets do. I explore the effects of voter bias on outcomes in an otherwise standard voting model and find that even slight external pressure on individuals in a committee tasked with coming to a collective decision can destroy the ability of that committee to arrive at the correct result, even when individuals have good information about the best decision to make. Furthermore, the quality of the decision made by such a committee can actually degrade as the committee size increases, in contrast with the canonical Condorcet Jury Theorem which predicts that a committee's ability to choose the right outcome increases quickly as more members are added.

Download or read book Essays in Market and Mechanism Design written by Marco Reuter and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Market Design written by and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This Ph. D. thesis is composed of four independent research papers in the field of Market Design. It begins with a general introduction for all four papers and ends with a brief conclusion. In this thesis, I study the impact of heterogeneous market participants on allocation outcomes in different market mechanisms; in addition, how to design alternative mechanisms that can more effectively allocate scarce resources with diverse economic and social goals. Chapter 1 studies the impact of affirmative action policies in the context of school choice. It addresses the following two questions: what are the causes of possible perverse consequence of affirmative action policies, and when the designer can effectively implement affirmative actions without unsatisfactory outcomes. Using the minority reserve policy in the student optimal stable mechanism as an example, I show that two acyclicity conditions, type-specific acyclicity and strongly type-specific acyclicity, are crucial for effective affirmative action policies. However, these two cycle conditions are almost impossible to be satisfied in any finite market in practice. Given the limitation of the point-wise effectiveness in finite markets, I further illustrate that the minority reserve policy is approximately effective in the sense that the probability of a random market containing type-specific cycles converges to zero when the copies of schools grow to infinite. Chapter 2 addresses the question of how ex ante asymmetry affects bidders' equilibrium strategies in two popular multi-unit auction rules: uniform-price auction (UPA) and discriminatory-price auction (DPA). I characterize the set of asymmetric monotone Bayes-Nash equilibria in a simple multi-unit auction game in which two units of a homogeneous object are auctioned among a set of bidders. I argue that bidders' strategic behavior essentially comes from their diverse market positions (i.e., the winning probability and the probability of deciding the market-clea

Download or read book Essays on the Design and Analysis of Markets written by Anthony Lee Zhang and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation is a collection of essays on the design and analysis of markets. I propose ways to change the rules of existing market mechanisms and analyze how these changes can increase market efficiency, and I develop empirical methods for analyzing market performance. Chapter 2 proposes a way to measure the manipulability of derivative contract markets. Chapter 3 proposes a new kind of license for allocating natural resource use rights. Chapter 4 develops general empirical methods based on mechanism design theory for analyzing a large class of trading games.

Download or read book Essays in Market Design written by Phuong Chi Le and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation studies two problems in market design: the random assignment with fractional endowments, and combinatorial auction with budget-constrained bidders. In the random assignment problem, a number of objects has to be assigned to a number of agents. Though the objects are indivisible, an assignment can be probabilistic: it can give an agent some probability of getting an object. I first formulate an exchange economy that resembles the random assignment problem and prove the existence of competitive equilibrium in this economy. I then propose a pseudo-market mechanism for the random assignment problem that is based on the competitive equilibrium. This mechanism is individually rational, Pareto Optimal and justified envy-free. The mechanism is, however, not incentive compatible. Budget constraints of the bidders are a very relevant feature in combinatorial auctions. I show that they pose serious challenges to many prominent existing auction formats. Given the limitations of existing mechanisms, it is useful to know what mechanisms can accommodate budget constraints. I restrict my search to mechanisms that are reasonable: they must be incentive compatible, individually rational, symmetric, non-wasteful and non-bossy. First focusing on the greedy domain, in which a bidder's marginal values, if non-zero, always exceeds his budget, I show that there exists an unique reasonable mechanism, called the Iterative Second Price Auction. For the general domain, however, no reasonable mechanism exists. I propose a mechanism that is a partial solution, called budget VCG. It is based on the principle that a winning bidder must be able to pay the externality that he imposes on other bidders. The budget VCG mechanism partially attains Pareto optimality and has some good incentive properties.

Download or read book The Handbook of Market Design written by Nir Vulkan and published by OUP Oxford. This book was released on 2013-08-29 with total page 706 pages. Available in PDF, EPUB and Kindle. Book excerpt: Economists often look at markets as given, and try to make predictions about who will do what and what will happen in these markets. Market design, by contrast, does not take markets as given; instead, it combines insights from economic and game theory together with common sense and lessons learned from empirical work and experimental analysis to aid in the design and implementation of actual markets In recent years the field has grown dramatically, partially because of the successful wave of spectrum auctions in the US and in Europe, which have been designed by a number of prominent economists, and partially because of the increase use of the Internet as the platform over which markets are designed and run There is now a large number of applications and a growing theoretical literature. The Handbook of Market Design brings together the latest research from leading experts to provide a comprehensive description of applied market design over the last two decades In particular, it surveys matching markets: environments where there is a need to match large two-sided populations to one another, such as medical residents and hospitals, law clerks and judges, or patients and kidney donors It also examines a number of applications related to electronic markets, e-commerce, and the effect of the Internet on competition between exchanges.

Download or read book Essays in Market and Mechanism Design written by Giorgio Paolo Martini and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: My dissertation consists of four chapters. In chapter 1, I study verifiable disclosure with multidimensional information. Chapter 2 (joint work with Piotr Dworczak) studies Bayesian persuasion when the Sender's preferences depend only on the mean of posterior beliefs. The first chapters present two contrasting ``persuasion'' models: in chapter 1, voluntary, verifiable disclosure (Sender has no commitment); in chapter 2, Bayesian persuasion or information design (Sender has full commitment). Chapter 3 (joint work with Nicolas Lambert and Michael Ostrovsky) studies a general model of quadratic games and characterizes their unique equilibrium. Finally, in chapter 4 I prove a novel impossibility theorem in the assignment problem.

Download or read book Essays on Market Design written by Eric Budish and published by . This book was released on 2009 with total page 426 pages. Available in PDF, EPUB and Kindle. Book excerpt: The first two essays of this thesis study the problem of combinatorial assignment, e.g., allocating schedules of courses to students, or schedules of shifts to interchangeable workers. Impossibility theorems have established that the only efficient and strategyproof mechanisms in this environment are dictatorships, which seem unfair. Any non-dictatorship solution will involve compromise of efficiency or strategyproofness. The first essay (joint with Estelle Cantillon) uses unusual data--consisting of agents' strategically reported preferences as well as their underlying true preferences--to study strategic behavior in the course-allocation mechanism used at Harvard Business School. We show that the mechanism is manipulable in theory, manipulated by students in practice, and that these manipulations cause meaningful welfare losses. However, we also find that ex-ante welfare is higher than under the random serial dictatorship. The second essay proposes a solution to the combinatorial assignment problem. I begin by proposing two new criteria of outcome fairness. The maximin share guarantee, based on the idea of divide-and-choose, generalizes and weakens fair share. Envy bounded by a single good weakens envy freeness.

Download or read book Essays in Mechanism Design written by Weixin Chen (Researcher in microeconomic theory) and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis consists of three papers in mechanism design. Chapter 1 is based on a paper of mine entitled "Quality Disclosure and Price Discrimination". Chapter 2 is based on "Penalty, Voting, and Collusion: a Common Agency Approach to Industrial Regulation and Political Power". Chapter 3 is based on "Partitional Information Revelation under Renegotiation". A key framework in mechanism design is screening: a principal who designs the contract induces agents with private information to select certain action(s) or bundle(s). Classical results are second-best distortion and Myerson ironing, which are derived when the agency involves a single task (or tasks independent across agents), an agent's information is privately known by himself, and there is full commitment. Chapter 1 considers incentivizing tasks that are related through a resource constraint. It studies the second-degree price discrimination when the supply quality follows some exogenous distribution, or more specifically, the design of information and pricing in a monopolistic market with product quality dispersion. The main message is that optimality requires a partial disclosure, and finer results on the allocation distortion depend on the heterogeneity of the buyers' preference. When such preference over assignment, i.e., quality distribution, has a uni-dimensional sufficient statistics in the quality space, the optimal distortion resembles Myerson's ironing and the optimal disclosure takes a partitional form. For more general preference, the optimal distortion departs from Myerson's result. Chapter 2 considers eliciting signals informative of the agent's private information from multiple sources. An interesting case is by considering a voting committee as the principal, where voting aggregates welfare-relevant information but faces corruptive incentives. The key insights are that the optimal rule is a binary verdict, resembling the principle of maximum deterrence, and the corruptive incentives typically push the optimal voting rule towards unanimity. Chapter 3 considers commitment with renegotiation: the counterparties can stick to the previously signed long-term contract or revise it with mutual consent. More specifically, it studies a long-term relationship between a seller and a buyer whose valuation (for a per-period service or a rental good) is private. In such a dynamic game, a new dimension of mechanism design, namely intertemporal type separation, arises as its induced belief-updating affects the rent extraction--efficiency tradeoff. The main message is that all PBE share the following property in the progressive screening process: at each history, the seller partitions the posterior support into countable intervals and offers a pooling contract to each of these intervals.