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Articles 1 - 12 of 12
Full-Text Articles in Social and Behavioral Sciences
Contracting Over Prices, Shurojit Chatterji, Sayantan Ghosal
Contracting Over Prices, Shurojit Chatterji, Sayantan Ghosal
Research Collection School Of Economics
We define a solution concept, perfectly contracted equilibrium, for an intertemporal exchange economy where agents are simultaneously price takers in spot commodity markets while engaging inefficient, non-Walrasian contracting over future prices. Without requiring that agents have perfect foresight, we show that perfectly contracted equilibrium outcomes are a subset of Pareto optimal allocations. It is a robust possibility for perfectly contracted equilibrium outcomes to differ from Arrow-Debreu equilibrium outcomes. We show that both centralized banking and retrading with bilateral contracting can lead to perfectly contracted equilibria.
The Structure Of Strategy-Proof Random Social Choice Functions Over Product Domains And Lexicographically Separable Preferences, Shurojit Chatterji, Souvik Roy, Arunava Sen
The Structure Of Strategy-Proof Random Social Choice Functions Over Product Domains And Lexicographically Separable Preferences, Shurojit Chatterji, Souvik Roy, Arunava Sen
Research Collection School Of Economics
We characterize the class of dominant-strategy incentive-compatible (or strategy-proof) random social choice functions in the standard multi-dimensional voting model where voter preferences over the various dimensions (or components) are lexicographically separable. We show that these social choice functions (which we call generalized random dictatorships) are induced by probability distributions on voter sequences of length equal to the number of components. They induce a fixed probability distribution on the product set of voter peaks. The marginal probability distribution over every component is a random dictatorship. Our results generalize the classic random dictatorship result in Gibbard (1977) and the decomposability results for …
Subgame Perfect Implementation Under Information Perturbations, Takashi Kunimoto, Drew Fudenberg, Takashi Kunimoto, Oliver Tercieux
Subgame Perfect Implementation Under Information Perturbations, Takashi Kunimoto, Drew Fudenberg, Takashi Kunimoto, Oliver Tercieux
Research Collection School Of Economics
We consider the robustness of extensive form mechanisms to deviations from common knowledge about the state of nature, which we refer to as information perturbations. First, we show that even under arbitrarily small information perturbations the Moore-Repullo mechanism does not yield (even approximately) truthful revelation and that in addition the mechanism has sequential equilibria with undesirable outcomes. More generally, we prove that any extensive form mechanism is fragile in the sense that if a non-Maskin monotonic social objective can be implemented with this mechanism, then there are arbitrarily small information perturbations under which an undesirable sequential equilibrium also exists. Finally, …
A Generalized Representation Theorem For Harsanyi's ('Impartial') Observer, Simon Grant, Atsushi Kajii, Ben Polak, Zvi Safra
A Generalized Representation Theorem For Harsanyi's ('Impartial') Observer, Simon Grant, Atsushi Kajii, Ben Polak, Zvi Safra
Research Collection School Of Economics
We provide an axiomatization of an additively separable social welfare function in the context of Harsanyi's impartial observer theorem. To do this, we reformulate Harsanyi's setting to make the lotteries over the identities the observer may assume independent of the social alternative.
Unilateral Measures And Emissions Mitigation, Shurojit Chatterji, Sayantan Ghosal, Sean Walsh, John Whalley
Unilateral Measures And Emissions Mitigation, Shurojit Chatterji, Sayantan Ghosal, Sean Walsh, John Whalley
Research Collection School Of Economics
We discuss global climate mitigation that builds on existing unilateral measures to cut emissions. We document and discuss the rationale for such unilateral measures argue that such measures have the potential to generate positive spillover effects both within and across countries. In a simple dynamic model of learning we show that while single countries on their own may never get to the point of switching completely to low emission activities, a learning process with positive spillovers across nations is more likely to deliver a global switch to low emissions. We discuss the key features of a new global Intellectual Property …
Inefficiency In The Shadow Of Unobservable Outside Options, Madhav S. Aney
Inefficiency In The Shadow Of Unobservable Outside Options, Madhav S. Aney
Research Collection School Of Economics
This paper considers the problem of allocating an object between two players in an environment with one sided asymmetric information when their outside options depend on each other's type, causing the outside option of the uninformed player to be unobservable to her. Consequently efficient mechanisms under budget balance are not always available even when there is no uncertainty about which of the two players values the object more. A simple condition on the outside options turns out to be both necessary and sufficient to guarantee the first best. I also characterise the second best allocation under some conditions and show …
Random Dictatorship Domains, Shurojit Chatterji, Arunava Sen, Huaxia Zeng
Random Dictatorship Domains, Shurojit Chatterji, Arunava Sen, Huaxia Zeng
Research Collection School Of Economics
A domain of preference orderings is a random dictatorship domain if every strategy- proof random social choice function satisfying unanimity defined on the domain, is a random dictatorship. Gibbard (1977) showed that the universal domain is a random dictatorship domain. We investigate the relationship between dictatorial and random dictatorship domains. We show that there exist dictatorial domains that are not random dictatorship domains. We provide stronger versions of the linked domain condition (introduced in Aswal et al. (2003)) that guarantee that a domain is a random dictatorship domain. A key step in these arguments that is of independent interest, is …
Nonlinear Cointegrating Regression Under Weak Identification, Xiaoxia Shi, Peter C. B. Phillips
Nonlinear Cointegrating Regression Under Weak Identification, Xiaoxia Shi, Peter C. B. Phillips
Research Collection School Of Economics
An asymptotic theory is developed for a weakly identified cointegrating regression model in which the regressor is a nonlinear transformation of an integrated process. Weak identification arises from the presence of a loading coefficient for the nonlinear function that may be close to zero. In that case, standard nonlinear cointegrating limit theory does not provide good approximations to the finite-sample distributions of nonlinear least squares estimators, resulting in potentially misleading inference. A new local limit theory is developed that approximates the finite-sample distributions of the estimators uniformly well irrespective of the strength of the identification. An important technical component of …
Testing For Jumps In Noisy High Frequency Data, Yacine Ait-Sahalia, Jean Jacod, Jia Li
Testing For Jumps In Noisy High Frequency Data, Yacine Ait-Sahalia, Jean Jacod, Jia Li
Research Collection School Of Economics
This paper proposes a robustification of the test statistic of Aït-Sahalia and Jacod (2009b) for the presence of market microstructure noise in high frequency data, based on the pre-averaging method of Jacod et al. (2010). We show that the robustified statistic restores the test's discriminating power between jumps and no jumps despite the presence of market microstructure noise in the data.
Wage-Vacancy Contracts And Coordination Frictions, Nicolas L. Jacquet, Serene Tan
Wage-Vacancy Contracts And Coordination Frictions, Nicolas L. Jacquet, Serene Tan
Research Collection School Of Economics
We consider a directed search model with risk-averse workers and risk-neutral entrepreneurs who can set up firms that post wage-vacancy contracts, i.e., contracts where firms can make payments to more than one applicant, and where the payments can be different for each applicant and be contingent on the number of applicants. We establish that the type of contracts the literature focuses on are not offered if firms can post wage-vacancy contracts. We show that there exists an equilibrium satisfying a Monotonic Expected Utility property which is efficient. Furthermore, we investigate the role of wage-vacancy contracts on welfare and competition.
A Comparison Of Cardinal Tournaments And Piece Rate Contracts With Liquidity Constrained Agents, Kosmas Marinakis, Theofanis Tsoulouhas
A Comparison Of Cardinal Tournaments And Piece Rate Contracts With Liquidity Constrained Agents, Kosmas Marinakis, Theofanis Tsoulouhas
Research Collection School Of Economics
Acelebrated result in the theory of tournaments is that relative performance evaluation (tournaments) is a superior compensation method to absolute performance evaluation (piece rate contracts) when the agents are risk-averse, the principal is risk-neutral or less risk-averse than the agents and production is subject to common shocks that are large relative to the idiosyncratic shocks. This is because tournaments get closer to the first best by filtering common uncertainty. This paper shows that, surprisingly, tournaments are superior even when agents are liquidity constrained so that transfers to them cannot fall short of a predetermined level. The rationale is that, by …
Single Peakedness And Giffen Demand, Massimiliano Landi
Single Peakedness And Giffen Demand, Massimiliano Landi
Research Collection School Of Economics
I provide a simple example of a single peaked utility function that generates a Giffen demand. The utility function is smooth, non piecewise defined, strictly concave but not globally increasing. A full characterization of the parameter conditions under which the Giffen demand arises is provided. In addition the properties of the demand function are studied: I find that the inferior commodity with a Giffen demand must be cheaper relatively to a substitute and that Giffen demand arises at relatively low levels of income. However it is not required that the share of income spent on that commodity be large.