Open Access. Powered by Scholars. Published by Universities.®
- Discipline
-
- Econometrics (30)
- Finance (10)
- Business (9)
- Behavioral Economics (7)
- Entrepreneurial and Small Business Operations (4)
-
- Growth and Development (4)
- Industrial Organization (4)
- International Economics (4)
- Public Affairs, Public Policy and Public Administration (4)
- Public Economics (4)
- Environmental Policy (3)
- Asian Studies (2)
- Education (2)
- Higher Education (2)
- International and Area Studies (2)
- Labor Economics (2)
- Macroeconomics (2)
- Organizational Behavior and Theory (2)
- Urban Studies and Planning (2)
- Agricultural and Resource Economics (1)
- Arts and Humanities (1)
- Finance and Financial Management (1)
- Income Distribution (1)
- Mathematics (1)
- Philosophy (1)
- Physical Sciences and Mathematics (1)
- Political Economy (1)
- Keyword
-
- Strategy-proofness (23)
- Incentive compatibility (13)
- Implementation (9)
- Robust mechanism design (8)
- Decomposability (7)
-
- Rationalizability (6)
- Restricted domains (6)
- Duality approach (5)
- Robustness (5)
- Sd-strategy-proofness (5)
- Bilateral trade (4)
- Budget balance (4)
- Complete information (4)
- Equal treatment of equals (4)
- Full implementation (4)
- Measurability (4)
- Mechanism design (4)
- Random social choice functions (4)
- Revealed preference (4)
- Sd-efficiency (4)
- Unanimity (4)
- Bundles (3)
- Competition (3)
- Compromise (3)
- Continuous implementation (3)
- Correlation (3)
- Ex post incentive compatibility (3)
- First-order belief (3)
- Fractional allocation (3)
- Global learning (3)
- Publication Year
- Publication
- Publication Type
Articles 1 - 30 of 207
Full-Text Articles in Economic Theory
Locally Robust Implementation Of Efficient Bilateral Trade With Correlated Beliefs, Takashi Kunimoto, Cuiling Zhang
Locally Robust Implementation Of Efficient Bilateral Trade With Correlated Beliefs, Takashi Kunimoto, Cuiling Zhang
Research Collection School Of Economics
We identify the ex ante welfare (EAW) condition as a necessary requirement to implement ex post efficient bilateral trade in any finite type space with interdependent values and correlated beliefs. As these finite settings become finer to approximate a continuous type space, we derive a limit EAW condition by taking the EAW condition in finite settings to its limit. We show that this limit condition trivially holds in the benchmark continuous setting admitting a full-support density function. We then insist on locally robust implementation by requiring efficient trade to be implemented uniformly across all finite type spaces that approximate the …
Compellingness In Nash Implementation, Shurojit Chatterji, Takashi Kunimoto, Paulo Daniel Salles Ramos
Compellingness In Nash Implementation, Shurojit Chatterji, Takashi Kunimoto, Paulo Daniel Salles Ramos
Research Collection School Of Economics
A social choice function (SCF) is said to be Nash implementable (in pure strategies) if there exists a mechanism in which every pure-strategy Nash equilibrium induces outcomes specified by the SCF. The main objective of this paper is to assess the impact of considering mixed-strategy equilibria in Nash implementation. We define compelling Nash implementation as a case where the implementing mechanism possesses a pure-strategy equilibrium that strictly Pareto dominates any undesired mixed-strategy equilibrium. We show that if the finite environment and the SCF to be implemented jointly satisfy what we call Condition COM, then we can construct a finite …
Rationalizable Incentives: Interim Rationalizable Implementation Of Correspondences, Takashi Kunimoto, Rene Saran, Roberto Serrano
Rationalizable Incentives: Interim Rationalizable Implementation Of Correspondences, Takashi Kunimoto, Rene Saran, Roberto Serrano
Research Collection School Of Economics
Are there ways to enforce incentives free of equilibrium considerations? When the normative goals for a set of agents can be summarized in a set-valued rule and agents take actions that are rationalizable, a new theory of incentives emerges in which standard Bayesian incentive compatibility (BIC) is relaxed significantly. The paper studies the interim rationalizable implementation of social choice sets with a Cartesian product structure, a leading example thereof being ex-post efficiency. Setwise incentive compatibility (setwise IC), much weaker than BIC, is shown to be necessary for implementation. Setwise IC enforces incentives flexibly within the entire correspondence, instead of the …
Corrigendum To “Interim Rationalizable Implementation Of Functions” (Kunimoto T, Saran R, Serrano R (2024) Mathematics Of Operations Research 49(3):1791–1824), Takashi Kunimoto, Rene Saran, Roberto Serrano
Corrigendum To “Interim Rationalizable Implementation Of Functions” (Kunimoto T, Saran R, Serrano R (2024) Mathematics Of Operations Research 49(3):1791–1824), Takashi Kunimoto, Rene Saran, Roberto Serrano
Research Collection School Of Economics
This is the brief corrigendum to “Interim rationalizable implementation of functions” [Kunimoto T, Saran R, Serrano R (2024) Interim rationalizable implementation of functions. Math. Oper Res. 49(3):1791–1824].
Efficient Bilateral Trade With Interdependent Values: The Use Of Two-Stage Mechanisms, Takashi Kunimoto, Cuiling Zhang
Efficient Bilateral Trade With Interdependent Values: The Use Of Two-Stage Mechanisms, Takashi Kunimoto, Cuiling Zhang
Research Collection School Of Economics
Efficient, voluntary bilateral trades are generally not implementable in an interdependent values environment with two-sided asymmetric information. To obtain more positive results, we consider two-stage mechanisms in which (i) the outcome (e.g., allocation of the goods) is determined first; (ii) the agents partially learn the state via their own outcome-decision payoffs; and (iii) transfers are finally made. We propose the approximate shoot-the-liar (AS) mechanism and identify Assumption 1, under which “approximately” efficient, voluntary trades are implementable. We further illustrate the permissiveness of the assumption, and characterize it in terms of the nature of interdependence in valuation functions – delineating the …
Robust Implementation In Rationalizable Strategies In General Mechanisms, Takashi Kunimoto, Rene Saran
Robust Implementation In Rationalizable Strategies In General Mechanisms, Takashi Kunimoto, Rene Saran
Research Collection School Of Economics
A social choice function (SCF) is robustly implementable in rationalizable strate-gies if every rationalizable strategy profile on every type space results in outcomes consistent with it. First, we establish an equivalence between robust implementation in rationalizable strategies and “weak rationalizable implementation”. Second, using the equivalence result, we identify weak robust monotonicity as a necessary and al-most sufficient condition for robust implementation in rationalizable strategies. This exhibits a contrast with robust implementation in interim equilibria, i.e., every equilib-rium on every type space achieves outcomes consistent with the SCF. Bergemann and Morris (2011) show that strict robust monotonicity is a necessary and …
Competition Through Entry Fees Between Auctions For Differentiated Objects, Massimiliano Landi, Domenico Menicucci, Domenico Colucci
Competition Through Entry Fees Between Auctions For Differentiated Objects, Massimiliano Landi, Domenico Menicucci, Domenico Colucci
Research Collection School Of Economics
This paper considers two competing auctions with objects differentiated according to the random utility framework introduced in Perloff and Salop (1985): bidders privately observe their values for the two objects, and values are ex ante i.i.d. across objects and across bidders. For the case of uniform distribution of values, we show that competition under entry fees is less intense than competition under reserve prices in the sense that sellers are better off, and bidders are worse off when competition takes place with entry fees rather than under reserve prices. The key difference between the two settings is that undercutting under …
Robust Contracting Under Distributional Uncertainty, Jiangtao Li, Kexin Wang
Robust Contracting Under Distributional Uncertainty, Jiangtao Li, Kexin Wang
Research Collection School of Economics
We study contract design when the principal has limited information about the output distributions induced by the agent's actions. In a baseline model where only the means are known, we show that increasing affine contracts are robustly optimal. The mean restrictions accommodate a wide range of output distributions, including extreme cases that help establish this optimality. We then extend the analysis to environments with additional constraints on the distributions. Our main result shows that the robust optimality of increasing affine contracts persists even when the principal knows more—for example, that each action induces a distribution with full support.
Undominated Mechanisms, Tilman Borgers, Jiangtao Li, Kexin Wang
Undominated Mechanisms, Tilman Borgers, Jiangtao Li, Kexin Wang
Research Collection School Of Economics
We study the design of mechanisms when the designer faces multiple plausible scenarios and is uncertain about the true scenario. A mechanism is dominated by another if the latter performs at least as well in all plausible scenarios and strictly better in at least one. A mechanism is undominated if no other feasible mechanism dominates it. We show how analyzing undominated mechanisms could be useful and illustrate the tractability of characterizing such mechanisms. This approach provides an alternative criterion for mechanism design under non-Bayesian uncertainty, complementing existing methods.
Efficient Bilateral Trade With Interdependent Values: The Use Of Two-Stage Mechanisms, Takashi Kunimoto, Cuiling Zhang
Efficient Bilateral Trade With Interdependent Values: The Use Of Two-Stage Mechanisms, Takashi Kunimoto, Cuiling Zhang
Research Collection School Of Economics
Efficient, voluntary bilateral trades are generally not implementable in an interdependent values environment with two-sided asymmetric information. To obtain more positive results, we consider two-stage mechanisms in which (i) the outcome (e.g., allocation of the goods) is determined first; (ii) the agents partially learn the state via their own outcome-decision payoffs; and (iii) transfers are finally made. We propose the approximate shoot-the-liar (AS) mechanism and identify Assumption 1, under which “approximately” efficient, voluntary trades are implementable. We further illustrate the permissiveness of the assumption, and characterize it in terms of the nature of interdependence in valuation functions—delineating the boundary between …
Three Essays On Robust Mechanism Design, Kexin Wang
Three Essays On Robust Mechanism Design, Kexin Wang
Dissertations and Theses Collection (Open Access)
This dissertation consists of three chapters that study the mechanism design problems when the designer does not completely know the economic environments. In the first chapter, we study the design of contracts when the principal has limited statistical information about the output distributions induced by the agent’s actions. In the baseline model, we consider a principal who only knows the mean of the output distribution for each action. The mean restrictions allow for a large set of profiles of output distributions, including some extreme output distributions that can be used to establish the robust optimality of increasing affine contracts. Motivated …
On Strategy-Proofness And The Salience Of Single-Peakedness In A Private Goods Allotment Problem, Shurojit Chatterji, Jordi Masso, Shigehiro Serizawa
On Strategy-Proofness And The Salience Of Single-Peakedness In A Private Goods Allotment Problem, Shurojit Chatterji, Jordi Masso, Shigehiro Serizawa
Research Collection School Of Economics
We consider strategy-proof rules operating on a rich domain of preference profiles in a set up where multiple private goods have to be assigned to a set of agents with entitlements and where preferences display satiation. We show that if the rule is in addition tops-only, same-sided and individually rational with respect to the entitlements, then the preferences in the domain have to satisfy a variant of single-peakedness (referred to as multi-dimensional single-peakedness relative to the entitlements). We also provide a converse of this main finding. It turns out that this domain coincides with the one already identified in a …
On The Decomposability Of Fractional Allocations, Shurojit Chatterji, Peng Liu
On The Decomposability Of Fractional Allocations, Shurojit Chatterji, Peng Liu
Research Collection School Of Economics
A common practice in dealing with the allocation of indivisible objects is to treat them as infinitely divisible and specify a fractional allocation, which is then implemented as a lottery on integer allocations that are feasible. The question we study is whether an arbitrary fractional allocation can be decomposed as a lottery on an arbitrary set of feasible integer allocations. The main result is a characterization of decomposable fractional allocations, that is obtained by transforming the decomposability problem into a maximum flow problem. We also provide a separate necessary condition for decomposability.
What Is The Fallacy Of Approximation?, Matthew Hammerton, Sovan Patra
What Is The Fallacy Of Approximation?, Matthew Hammerton, Sovan Patra
Research Collection School of Social Sciences
Many philosophers appeal to the “fallacy of approximation”, or “problem of second best”. However, despite the pervasiveness of such appeals, there has been only a single attempt to provide a systematic account of what the fallacy is. We identify the shortcomings of this account and propose a better one in its place. Our account not only captures all the contexts in which approximation-based reasoning occurs but also systematically explains the several different ways in which it can be in error.
Associative Networks In Decision Making, Jiangtao Li, Rui Tang, Mu Zhang
Associative Networks In Decision Making, Jiangtao Li, Rui Tang, Mu Zhang
Research Collection School Of Economics
We present a model of associative networks that captures how a decision maker expands her consideration set through mental associations between alternatives. This model serves as a tool to understand the influence of association on decision making. As a proof of concept, we characterize this model within a random attention framework and demonstrate that all the relevant parameters are uniquely identifiable. Notably, in a novel choice domain where not all observable alternatives are available, the presence of unavailable alternatives can affect the choice frequencies of other alternatives through association.
A Robust Optimization Approach To Mechanism Design, Jiangtao Li, Kexin Wang
A Robust Optimization Approach To Mechanism Design, Jiangtao Li, Kexin Wang
Research Collection School Of Economics
We study the design of mechanisms when the mechanism designer faces local uncertainty about agents’ beliefs. Specifically, we consider a designer who does not know the exact beliefs of the agents but is confident that her estimate is within ϵ of the beliefs held by the agents (where ϵ reflects the degree of local uncertainty). Adopting the robust optimization approach, we design mechanisms that incentivize agents to truthfully report their payoff-relevant information regardless of their actual beliefs. For any fixed ϵ, we identify necessary and sufficient conditions under which requiring this sense of robustness is without loss of revenue for …
Rank-Guaranteed Auctions, Wei He, Jiangtao Li, Weijie Zhong
Rank-Guaranteed Auctions, Wei He, Jiangtao Li, Weijie Zhong
Research Collection School Of Economics
We propose a combinatorial ascending auction that is “approximately” optimal, requiring minimal rationality to achieve this level of optimality, and is robust to strategic and distributional uncertainties. Specifically, the auction is rankguaranteed, meaning that for any menu M and any valuation profile, the ex-post revenue is guaranteed to be at least as high as the highest revenue achievable from feasible allocations, taking the (|M| + 1)th-highest valuation for each bundle as the price. Our analysis highlights a crucial aspect of combinatorial auction design, namely, the design of menus. We provide simple and sufficient menus in various settings.
Coarse Revealed Preference, Gaoji Hu, Jiangtao Li, John K-H Quah, Rui Tang
Coarse Revealed Preference, Gaoji Hu, Jiangtao Li, John K-H Quah, Rui Tang
Research Collection School Of Economics
We propose a novel concept of rationalization, called coarse rationalization, tailored for the analysis of datasets where an agent’s choices are imperfectly observed. We characterize those datasets which are rationalizable in this sense and present an efficient algorithm to verify the characterizing condition. We then demonstrate how our results can be applied through a duality approach to test the rationalizability of datasets with perfectly observed choices but imprecisely observed linear budget sets. For datasets that consist of both perfectly observed feasible sets and choices but are inconsistent with perfect rationality, our results could be used to measure the extent to …
Interim Regret Minimization, Wei He, Jiangtao Li, Kexin Wang
Interim Regret Minimization, Wei He, Jiangtao Li, Kexin Wang
Research Collection School Of Economics
We consider a robust version of monopoly pricing when the seller only knows the bound on valuations and the mean of the distribution of the buyer’s value. The seller seeks to minimize interim regret, the forgone expected revenue due to not knowing the distribution of the buyer’s value. The optimal pricing policy randomizes over a range of prices; the support of the pricing policy is bounded away from zero.
Obfuscation And Rational Inattention, Aljoscha Janssen, Johannes Kasinger
Obfuscation And Rational Inattention, Aljoscha Janssen, Johannes Kasinger
Research Collection School Of Economics
We study the behavior of duopolistic firms that can obfuscate their prices before competing on price. Obfuscation affects the rational inattentive consumers' optimal information strategy, which determines the probabilistic demand. Our model advances related models by allowing consumers to update their unrestricted prior beliefs with an informative signal of any form. We show that the game may result in an obfuscation equilibrium with high prices or a transparency equilibrium with low prices and no obfuscation, providing an argument for market regulation. Obfuscation equilibria cease to exist for low information costs and if one firm seems a priori considerably more attractive.
The Interplay Of Interdependence And Correlation In Bilateral Trade, Takashi Kunimoto, Cuiling Zhang
The Interplay Of Interdependence And Correlation In Bilateral Trade, Takashi Kunimoto, Cuiling Zhang
Research Collection School Of Economics
Crémer and McLean (1988) show that the seller can extract full surplus almost always by an incentive compatible, individually rational mechanism in a single-unit auction model with a finite type space in which agents' beliefs are correlated and their valuations can be interdependent. We first show that this paradoxically positive result can be extended to a model of bilateral trades. To make it more realistic, we investigate when ex-post efficiency and ex-post budget balance in bilateral trades can also be achieved by an incentive compatible, individually rational mechanism. We identify a necessary condition for the existence of such mechanisms and …
High-Dimensional Iv Cointegration Estimation And Inference, Peter C. B. Phillips, Igor L. Kheifets
High-Dimensional Iv Cointegration Estimation And Inference, Peter C. B. Phillips, Igor L. Kheifets
Research Collection School Of Economics
A semiparametric triangular systems approach shows how multicointegrating linkages occur naturally in an I(1) cointegrated regression model when the long run error variance matrix in the system is singular. Under such singularity, cointegrated I(1) systems embody a multicointegrated structure that makes them useful in many empirical settings. Earlier work shows that such systems may be analyzed and estimated without appealing to the associated I(2) system but with suboptimal convergence rates and potential asymptotic bias. The present paper develops a robust approach to estimation and inference of such systems using high dimensional IV methods that have appealing asymptotic properties like those …
Equal Predictive Ability Tests Based On Panel Data With Applications To Oecd And Imf Forecasts, Oguzhan Akgun, Alain Pirotte, Giovanni Urga, Zhenlin Yang
Equal Predictive Ability Tests Based On Panel Data With Applications To Oecd And Imf Forecasts, Oguzhan Akgun, Alain Pirotte, Giovanni Urga, Zhenlin Yang
Research Collection School Of Economics
We propose two types of equal predictive ability (EPA) tests with panels to compare the predictions made by two forecasters. The first type, S-statistics, focuses on the overall EPA hypothesis, which states that the EPA holds, on average, over all panel units and over time. The second type, C-statistics, focuses on the clustered EPA hypothesis where the EPA holds jointly for a fixed number of clusters of panel units. The asymptotic properties of the proposed tests are evaluated under weak and strong cross-sectional dependence. An extensive Monte Carlo simulation shows that the proposed tests have very good finite sample properties, …
Decomposability And Strategy-Proofness In Multidimensional Models, Shurojit Chatterji, Huaxia Zeng
Decomposability And Strategy-Proofness In Multidimensional Models, Shurojit Chatterji, Huaxia Zeng
Research Collection School Of Economics
We introduce the notion of a multidimensional hybrid preference domain on a (finite) set of alternatives that is a Cartesian product of finitely many components. We demonstrate that in a model of public goods provision, multidimensional hybrid preferences arise naturally through assembling marginal preferences under the condition of semi-separability - a weakening of separability. The main result shows that under a suitable “richness” condition, every strategy-proof rule on this domain can be decomposed into component-wise strategy-proof rules, and more importantly every domain of preferences that reconciles decomposability of rules with strategy-proofness must be a multidimensional hybrid domain.
Legal Protection Of Property Rights: A Dynamic Evolution Model, Fali Huang
Legal Protection Of Property Rights: A Dynamic Evolution Model, Fali Huang
Research Collection School Of Economics
This paper presents an analysis of a dynamic evolution model of institutions, focusing on the factors affecting the security of property rights such as coercive capacity, political power, legal quality, and private protection. These factors are endogenously determined in equilibrium, allowing legal quality to serve as a summary indicator of property security. The primary finding of the study indicates that the legal protection of property rights tends to increase over time, driven by a decline in the economy's vulnerability to expropriation, particularly due to the growing importance of commercial and industrial activities relative to agriculture. Furthermore, the coexistence of the …
Limit Theory For Locally Flat Functional Coefficient Regression, Peter C. B. Phillips, Ying Wang
Limit Theory For Locally Flat Functional Coefficient Regression, Peter C. B. Phillips, Ying Wang
Research Collection School Of Economics
Functional coefficient (FC) regressions allow for systematic flexibility in the responsiveness of a dependent variable to movements in the regressors, making them attractive in applications where marginal effects may depend on covariates. Such models are commonly estimated by local kernel regression methods. This paper explores situations where responsiveness to covariates is locally flat or fixed. The paper develops new asymptotics that take account of shape characteristics of the function in the locality of the point of estimation. Both stationary and integrated regressor cases are examined. The limit theory of FC kernel regression is shown to depend intimately on functional shape …
Connecting The (Dirty) Dots: Current Account Surplus And Polluting Production, Jungho Lee, Shang-Jin Wei, Jianhuan Xu
Connecting The (Dirty) Dots: Current Account Surplus And Polluting Production, Jungho Lee, Shang-Jin Wei, Jianhuan Xu
Research Collection School Of Economics
According to the existing open-economy macroeconomics literature, a current account surplus is associated with a welfare loss only when distortions exist in either savings or investment. We propose a new welfare effect even in the absence of such distortions. In our theory, a trade imbalance − the largest component of a current account imbalance − interacts with a country’s pollution control (“cleanness”) regime to generate welfare effects outside the standard channels. In particular, a trade surplus alters the shipping costs and composition of a country’s imports, producing a welfare loss associated with greater pollution.
Interim Rationalizable Implementation Of Functions, Takashi Kunimoto, Rene Saran, Roberto Serrano
Interim Rationalizable Implementation Of Functions, Takashi Kunimoto, Rene Saran, Roberto Serrano
Research Collection School Of Economics
This paper investigates rationalizable implementation of social choice functions (SCFs) in incomplete information environments. We identify weak interim rationalizable monotonicity (weak IRM) as a novel condition and show it to be a necessary and almost sufficient condition for rationalizable implementation. We show by means of robust examples that interim rationalizable monotonicity (IRM), found in the literature, is strictly stronger than weak IRM and that IRM is not necessary for rationalizable implementation, as had been previously claimed. These examples also demonstrate that Bayesian monotonicity, the key condition for full Bayesian implementation, is not necessary for rationalizable implementation. That is, rationalizable implementation …
Competing Auctions With Non-Identical Objects, Massimiliano Landi, Domenico Menicucci, Andrey Sarychev
Competing Auctions With Non-Identical Objects, Massimiliano Landi, Domenico Menicucci, Andrey Sarychev
Research Collection School Of Economics
We study a competition model with two sellers that auction non-identical objects, unlike most of the literature on competing auctions. Each bidder has bidimensional private information, his values for the objects, and chooses the auction in which he participates (if any) after each seller has set a reserve price for her auction. We show that in some cases the duopoly reserve price is greater than the reserve price for a monopolist auctioning a single object; thus, an increase in the number of sellers may make some bidder’s types worse off. In our analysis we first characterize the unique symmetric equilibrium …
Continuous Implementation With Payoff Knowledge, Yi-Chun Chen, Takashi Kunimoto, Yifei Sun
Continuous Implementation With Payoff Knowledge, Yi-Chun Chen, Takashi Kunimoto, Yifei Sun
Research Collection School Of Economics
The literature on robust mechanism design assumes players' knowledge about a fixed payoff environment and investigates global robustness of optimal mechanisms to large changes in the information structure. Acknowledging global robustness as a demanding requirement, we propose continuous implementation as a notion of local robustness. Keeping the assumption of payoff knowledge, we say that an SCF is continuously implementable if there exists a mechanism which yields the outcome close to the desired one for all types close to the planner's initial model. We show that when a generic correlation condition is imposed on the class of interdependent-value environments, any (interim) …