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Essays On Dynamic Games And Mechanism Design
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Book Synopsis Essays on Information in Dynamic Games and Mechanism Design by : Daehyun Kim
Download or read book Essays on Information in Dynamic Games and Mechanism Design written by Daehyun Kim and published by . This book was released on 2019 with total page 153 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation studies how asymmetric information between economic agents interacts with their incentive in dynamic games and mechanism design. Chapter 1 and Chapter 2 study this in mechanism design, especially focusing on robustness of mechanisms when a mechanism designer's knowledge on agents' belief and higher order beliefs is not perfect. In Chapter 1 we introduce a novel robustness notion into mechanism design, which we term confident implementation; and characterize confidently implementable social choice correspondences. In Chapter 2, we introduce another robust notion, p-dominant implementation where p [0, 1]N and N N is the number of agents, and fully characterize p-dominant implementable allocations in the quasilinear environment. Chapter 1 and Chapter 2 are related in the following way: for some range of p, a p-dominant implementable social choice correspondence is confidently implementable. In Chapter 3, we study information disclosure problem to manage reputation. To study this, we consider a repeated game in which there are a long-run player and a stream of short-run players; and the long-run player has private information about her type, which is either commitment or normal. We assume that the shot-run player only can observe the past K N periods of information disclosed by the long-run player. In this environment, we characterize the information disclosure behavior of the long-run player and also equilibrium dynamics whose shape critically depends on the prior.
Book Synopsis Essays on Dynamic Games and Mechanism Design by : Ruitian Lang
Download or read book Essays on Dynamic Games and Mechanism Design written by Ruitian Lang and published by . This book was released on 2014 with total page 161 pages. Available in PDF, EPUB and Kindle. Book excerpt: The dissertation considers three topics in dynamic games and mechanism design. In both problems, asymmetric information causes inefficiency in production and allocation. The first chapter considers the inefficiency from the principal's inability to observes the agent's effort or cost of effort, and explores its implication to the principal's response to the combination of the output and the signal about the cost of effort. For example, the principal may punish the agent more harshly for low output when signals suggest that cost of effort is high when the effort is of high value for the principal. This chapter also classifies the long-run behavior of the relationship between the principal and the agent. Depending on whether the agent is strictly risk-averse and whether he is protected by limited liability, the state of the relationship may or may not converge to a stationary state and the stationary state may nor may not depend on the initial condition. The second chapter considers the re-allocation of assets among entrepreneurs with different matching qualities, which contributes to the growth of the whole economy. Due to reasons that are not explicitly modeled, assets are not automatically allocated to entrepreneurs who are best at operating them from the beginning, and this inefficiency is combined with inefficiency in the asset market and potential imperfection of labor contracting. When asset re-allocation can become a main source of economic growth, this chapter argues that imperfection in the labor contracting environment may boost the economic growth. The third chapter assumes that the agent's output is contractible but he can privately acquire more information about his cost of production prior to contracting. Compared to the optimal screening contract, the principal's contract in this case must not only induce the agent to "tell the truth", but also to give the agent the incentive to acquire appropriate amount of information. This may create distortion of allocation to the most efficient type and whether this happens is related to the marginal loss incurred by the principal from the cost of information acquisition.
Book Synopsis Essays on Repeated Games and Mechanism Design by : Yangwei Song
Download or read book Essays on Repeated Games and Mechanism Design written by Yangwei Song and published by . This book was released on 2017 with total page 124 pages. Available in PDF, EPUB and Kindle. Book excerpt: "My dissertation consists of two essays: the first essay studies infinitely repeated games in which discount factors can depend on actions; the second essay studies efficient implementation in a single object allocation problem in which valuations are interdependent and agents are ambiguity aversion. The broad theme is to investigate how standard results in the study of game theory need to be modified when we allow for non-standard preferences. The first chapter studies infinitely repeated games in which the players' rates of time preference may evolve over time, depending on what transpires in the game. A key result is that in any first best equilibrium of the repeated prisoners' dilemma, the players must eventually cooperate. If we assume that the players become more patient as they obtain better outcomes, we show that cooperation prevails from the beginning of the game and is thus the unique outcome of any first best equilibrium. The latter result is suitably extended to all symmetric two player games. A separate contribution is to propose a framework in which intertemporal trade can emerge as a first best equilibrium of a repeated strategic interaction, generating predictions that differ from those in the standard framework. The second chapter considers a single object allocation problem with multidimensional signals and interdependent valuations. When agents' signals are statistically independent, Jehiel and Moldovanu [42] show that efficient and Bayesian incentive compatible mechanisms generally do not exist. In this paper, we extend the standard model to accommodate maxmin agents and obtain necessary as well as sufficient conditions under which efficient allocations can be implemented. In particular, we derive a condition that quantifies the amount of ambiguity necessary for efficient implementation. We further show that under some natural assumptions on the preferences, this necessary amount of ambiguity becomes sufficient. Finally, we provide a definition of informational size such that given any nontrivial amount of ambiguity, efficient allocations can be implemented if agents are sufficiently informationally small."--Pages vii-viii.
Book Synopsis Essays in Game Theory and Mechanism Design by : Vi Thi Lan Cao
Download or read book Essays in Game Theory and Mechanism Design written by Vi Thi Lan Cao and published by . This book was released on 2019 with total page 162 pages. Available in PDF, EPUB and Kindle. Book excerpt: "In Chapter 1, for a dynamic partnership with moral hazard and adverse selection, we propose a profit division mechanism that identifies and incentivizes productive workers. The proposed mechanism satisfies constrained efficiency, periodic Bayesian incentive compati- bility, interim individual rationality, and ex-post budget balance. The corresponding profit division rule is implemented in perfect Bayesian equilibrium by a voting mechanism, in which each member is given a menu and is asked to vote. In each period, each member receives a compensation package which consists of an equity share and a fixed wage payment. Members' valuations of equity shares are interdependent and depend on endogenous effort contributions. In Chapter 2, we construct an M-round Prisoner's Dilemma epistemic game (1
Book Synopsis Incentives and Institutions by : Serkan Kucuksenel
Download or read book Incentives and Institutions written by Serkan Kucuksenel and published by . This book was released on 2009 with total page 200 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Essays in Dynamic Games by : Juan Escobar
Download or read book Essays in Dynamic Games written by Juan Escobar and published by . This book was released on 2009 with total page 130 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Dynamic Games and Mechanisms with Serially Dependent Private Information by : Juuso Tuomas Toikka
Download or read book Dynamic Games and Mechanisms with Serially Dependent Private Information written by Juuso Tuomas Toikka and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three essays. In "A Folk Theorem with Markovian Private Information" (with Juan F. Escobar) we consider repeated Bayesian two-player games in which the players' types evolve according to an irreducible Markov chain, type transitions are independent across players, and players have private values. The main result shows that, with communication, any Pareto efficient payoff vector above a minmax value can be approximated arbitrarily closely in a perfect Bayesian equilibrium as the discount factor goes to one. In the second essay, "Dynamic Mechanism Design: Incentive Compatibility, Profit Maximization, and Information Disclosure" (with Alessandro Pavan and Ilya R. Segal), we examine the design of dynamic screening mechanisms for environments in which the agents' types follow a stochastic process, decisions may be made over time, and the decisions may affect the type process. We derive a formula for an agent's equilibrium payoff in an incentive-compatible mechanism, which generalizes Mirrlees's envelope formula of static mechanism design. When specialized to quasi-linear environments, the formula yields a dynamic revenue-equivalence result and an expression for dynamic virtual surplus, which is instrumental for the design of profit-maximizing mechanisms. We also provide sufficient conditions for incentive compatibility. We apply the results to derive optimal dynamic contracts for a number of novel settings. The final essay, "Ironing without Control, " extends a method for solving a class of optimization problems, encountered frequently in mechanism design, where a functional is maximized over the set of nondecreasing functions. For example, the approach can be used to solve principal-agent models with adverse selection.
Book Synopsis Essays on Dynamic Mechanism Design by : Konrad Mierendorff
Download or read book Essays on Dynamic Mechanism Design written by Konrad Mierendorff and published by . This book was released on 2010 with total page 87 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Essays on Dynamic Mechanism Design by : Anqi Li
Download or read book Essays on Dynamic Mechanism Design written by Anqi Li and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation advocates dynamic mechanism design as a useful tool to tackle theoretical challenges in microeconomics and to solve real world institutional design problems. It is composed of two chapters. In the first chapter, I study durable goods sales with a dynamic population of buyers. My contribution is to devise a Multi-round Simultaneous Ascending Auction with Generalized Reserve Price (MSAAGR) to implement the efficient allocation, and to contrast MSAAGR with the standard uniform price auction to highlight the implication of population dynamics on the design of trading platforms. In the second chapter, I estalibsh the possibility of sustaining long-term cooperation in infinitely repeated private monitoring games with scarce signals. My contribution is to construct a novel Budget Mechanism with Cross-Checking (BMCC) which, by linking players' action choices over time, virtually implements the efficient outcome with a vanishing incentive cost as the horizon of the game grows and the players become increasingly patient.
Book Synopsis Three Essays on Dynamic Games in Industrial Organization by : Jin-Soo Yoo
Download or read book Three Essays on Dynamic Games in Industrial Organization written by Jin-Soo Yoo and published by . This book was released on 1990 with total page 198 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Essays on Mechanism Design with Limited Communication and Congestion in Global Games by : Nenad Kos
Download or read book Essays on Mechanism Design with Limited Communication and Congestion in Global Games written by Nenad Kos and published by . This book was released on 2008 with total page 150 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Essays on Evolutionary Game Theory and Its Applications by : Shota Fujishima
Download or read book Essays on Evolutionary Game Theory and Its Applications written by Shota Fujishima and published by . This book was released on 2013 with total page 95 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three essays on evolutionary game theory and its applications. The first essay considers mechanism design in the evolutionary game-theoretic framework. The second essay studies equilibrium selection of coordination games by using an evolutionary game-theoretic concept. The third essay formulates a multi-regional economic growth model as an evolutionary game and characterizes the stability of its equilibria under an evolutionary dynamic. The summaries of each essay are provided below. In the first essay, I consider an implementation problem in a class of congestion games with players that have heterogeneous costs of taking actions. One application is to traffic congestion with drivers having heterogeneous time costs. The planner would like to design a price scheme under which the economy converges to an epsilon-optimum from any initial state when he does not have full knowledge of the cost functions, and he can observe only the aggregate strategy distribution. Although the planner would like to internalize the externalities, the informational constraints compel him to estimate their values. Using the optimality and equilibrium conditions, I construct a practical estimation procedure that yields the true values of externalities in the long-run. Moreover, I show that our scheme makes the epsilon-optimum globally stable under the best response dynamic if the externalities among players taking the same action are sufficiently large relative to those among players taking different actions. In the second essay, I study the long-run outcomes of noisy asynchronous repeated games with players that are heterogeneous in in terms of their patience. The players repeatedly play a 2-by-2 coordination game with random pair-wise matching. The games are noisy because the players may make mistakes when choosing their actions and are asynchronous because only one player can move in each period. I characterize the long-run outcomes of Markov perfect equilibrium that are robust to the mistakes and show that if there is a sufficiently patient player, the efficient state can be the unique robust outcome even if it is risk-dominated. Because I need heterogeneity for the result, I argue that it enables the most patient player in effect to be the leader. In the third essay, I consider a microfounded urban growth model with two regions and a mass of mobile workers to study interactions among growth, agglomeration, and urban congestion. Unlike previous research in the urban growth literature, I formulate the model as a one-shot game and take an evolutionary game-theoretic approach for stability analysis. My approach enables us to analyze the stability of nonstationary equilibria in which populations of each region are not constant over time. I show that if both the expenditure share for housing and inter-regional transport cost are small, a stable stationary equilibrium does not exist. Moreover, in such a case, I show that there can exist a stable nonstationary equilibrium in which mobile workers agglomerate in one region at first but some of them migrate to the other region later. I argue that such a nonstationary location pattern is related to return migration.
Book Synopsis Essays on Mechanism and Market Design by : Aaron Luke Bodoh-Creed
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.
Book Synopsis Essays on Dynamic Games by : Rahul Deb
Download or read book Essays on Dynamic Games written by Rahul Deb and published by . This book was released on 2010 with total page 250 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Essays on Dynamic Games by : Lucas Maestri
Download or read book Essays on Dynamic Games written by Lucas Maestri and published by . This book was released on 2011 with total page 352 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Mechanisms and Games for Dynamic Spectrum Allocation by : Tansu Alpcan
Download or read book Mechanisms and Games for Dynamic Spectrum Allocation written by Tansu Alpcan and published by Cambridge University Press. This book was released on 2014 with total page 604 pages. Available in PDF, EPUB and Kindle. Book excerpt: An innovative and comprehensive book presenting state-of-the-art research into wireless spectrum allocation based on game theory and mechanism design.
Book Synopsis Twenty Lectures on Algorithmic Game Theory by : Tim Roughgarden
Download or read book Twenty Lectures on Algorithmic Game Theory written by Tim Roughgarden and published by Cambridge University Press. This book was released on 2016-08-30 with total page 356 pages. Available in PDF, EPUB and Kindle. Book excerpt: Computer science and economics have engaged in a lively interaction over the past fifteen years, resulting in the new field of algorithmic game theory. Many problems that are central to modern computer science, ranging from resource allocation in large networks to online advertising, involve interactions between multiple self-interested parties. Economics and game theory offer a host of useful models and definitions to reason about such problems. The flow of ideas also travels in the other direction, and concepts from computer science are increasingly important in economics. This book grew out of the author's Stanford University course on algorithmic game theory, and aims to give students and other newcomers a quick and accessible introduction to many of the most important concepts in the field. The book also includes case studies on online advertising, wireless spectrum auctions, kidney exchange, and network management.
