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Author :
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (14 download)
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:
Author : Eric Samuel Mayefsky
Publisher : Stanford University
ISBN 13 :
Total Pages : 106 pages
Book Rating : 4.F/5 ( download)
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.
Author : Fanqi Shi
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (11 download)
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.
Author : Feng Ruan
Publisher :
ISBN 13 :
Total Pages : 87 pages
Book Rating : 4.:/5 (874 download)
Download or read book Essays on Market Structure written by Feng Ruan and published by . This book was released on 2012 with total page 87 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Siqi Pan
Publisher :
ISBN 13 :
Total Pages : 112 pages
Book Rating : 4.:/5 (998 download)
Download or read book Essays on Matching Theory and Behavioral Market Design written by Siqi Pan and published by . This book was released on 2017 with total page 112 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation focuses on the design and implementation of matching markets where transfers are not available, such as college admissions, school choice, and certain labor markets. The results contribute to the literature from both a theoretical and a behavioral perspective, and may have policy implications for the design of some real-life matching markets. Chapter 1, “Exploding Offers and Unraveling in Two-Sided Matching Markets,” studies the unraveling problem prevalent in many two-sided matching markets that occurs when transactions become inefficiently early. In a two-period decentralized model, I examine whether the use of exploding offers can affect agents' early moving incentives. The results show that when the culture of the market allows firms to make exploding offers, unraveling is more likely to occur, leading to a less socially desirable matching outcome. A market with an excess supply of labor is less vulnerable to the presence of exploding offers; yet the conclusion is ambiguous for a market with a greater degree of uncertainty in early stages, which depends on the specific information structure. While a policy banning exploding offers tends to be supported by high quality firms and workers, it can be opposed by those of lower quality. This explains the prevalence of exploding offers in practice. Chapter 2, “Constrained School Choice and Information Acquisition,” investigates a common practice of many school choice programs in the field, where the length of students' submitted preference lists are constrained. In an environment where students have incomplete information about others’ preferences, I theoretically study the effect of such a constraint under both a Deferred Acceptance mechanism (DA) and a Boston mechanism (BOS). The result shows that ex-ante stability can only be ensured under an unconstrained DA, but not under a constrained DA, an unconstrained BOS, or a constrained BOS. In a lab experiment, I find that the constraint also affects students’ information acquisition behavior. Specifically, when faced with a constraint, students tend to acquire less wasteful information and distribute more efforts to acquire relevant information under DA; such an effect is not significant under BOS. Overall, the constraint has a negative effect on efficiency and stability under both mechanisms. Chapter 3, “Targeted Advertising on Competing Platforms,” is jointly written with Huanxing Yang. We investigate targeted advertising in two-sided markets. Each of the two competing platforms has single-homing consumers on one side and multi-homing advertising firms on the other. We focus on how asymmetry in platforms’ targeting abilities translates into asymmetric equilibrium outcomes, and how changes in targeting ability affect the price and volume of ads, consumer welfare, and advertising firms' profits. We also compare social incentives and equilibrium incentives in investing in targeting ability. Chapter 4, “The Instability of Matching with Overconfident Agents: Laboratory and Field Investigations,” focuses on centralized college admissions markets where students are evaluated and allocated based on their performance on a standardized exam. A single exam’s measurement error causes the exam-based priorities to deviate from colleges' aptitude-based preferences: a student who underperforms in one exam may lose her placement at a preferred college to someone with a lower aptitude. The previous literature proposes a solution of combining a Boston algorithm with pre-exam preference submission. Under the assumption that students have perfect knowledge of their relative aptitudes before taking the exam, the suggested mechanism intends to trigger a self-sorting process, with students of higher (lower) aptitudes targeting more (less) preferred colleges. However, in a laboratory experiment, I find that such a self-sorting process is skewed by overconfidence, which leads to a welfare loss larger than the purported benefits. Moreover, the mechanism introduces unfairness by rewarding overconfidence and punishing underconfidence, thus serving as a gender penalty for women. I also analyze field data from Chinese high schools; the results suggest similar conclusions as in the lab.
Author : Aaron Luke Bodoh-Creed
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (653 download)
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.
Author : Kentaro Tomoeda
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (995 download)
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.
Author : Eric Samuel Mayefsky
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (747 download)
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.
Author :
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (884 download)
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.
Author : Nicolás Andrés Figueroa González
Publisher :
ISBN 13 :
Total Pages : 146 pages
Book Rating : 4.:/5 (319 download)
Download or read book Two Essays in Mechanism Design written by Nicolás Andrés Figueroa González and published by . This book was released on 2006 with total page 146 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Min Ho Shin
Publisher :
ISBN 13 :
Total Pages : 294 pages
Book Rating : 4.:/5 (33 download)
Download or read book Essays on Mechanism Design written by Min Ho Shin and published by . This book was released on 1993 with total page 294 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Vasiliki Skreta
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (14 download)
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:
Author : Anthony Lee Zhang
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (11 download)
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.
Author : Biung-Ghi Ju
Publisher :
ISBN 13 :
Total Pages : 378 pages
Book Rating : 4.:/5 (483 download)
Download or read book Essays in Mechanism Design written by Biung-Ghi Ju and published by . This book was released on 2001 with total page 378 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Levent Ulku
Publisher :
ISBN 13 :
Total Pages : 71 pages
Book Rating : 4.:/5 (53 download)
Download or read book Essays in Mechanism Design written by Levent Ulku and published by . This book was released on 2008 with total page 71 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three essays in the theory of mechanism design under incomplete information. In the first essay, we analyze an implementation problem in which monetary transfers are feasible, valuations are interdependent and the set of available choices lies in a product space of lattices. This framework is general enough to subsume many interesting examples, including allocation problems with multiple objects. We identify a class of social choice rules which can be implemented in ex post equilibrium. We identify conditions under which ex post efficient social choice rules are implementable using monotone selection theory. The key conditions are extensions of the single crossing property and supermodularity. These conditions can be replaced with more tractable conditions in multiobject allocation problems with either two objects or two agents. I also show that the payments which implement monotone social decision rules coincide with the payments of (1) the classical Vickrey-Clarke-Groves mechanism with private values, and (2) the generalized Vickrey auction introduced by Ausubel [1999] in multiunit allocation problems. The second essay generalizes the analysis of optimal (revenue maximizing) mechanism design for the seller of a single object introduced by Myerson [1981]. We consider a problem in which the seller has several heterogeneous objects and buyers' valuations depend on each other's private information. We analyze two nonnested environments in which incentive constraints can be replaced with more tractable monotonicity conditions. We establish conditions under which these monotonicity conditions can be ignored, and show that several earlier analyses of the optimal mechanism design problem can be unified and generalized. In particular, problems with two complementary goods in Levin [1997] and multiunit auction problems in Maskin and Riley [1989] and Branco [1996] are special cases. The third essay considers the problem of selling internet advertising slots to advertisers. Under suitable conditions, we solve for the payments imposed by an optimal mechanism and show that it can be decentralized via prices using a linear assignment approach. At every configuration of private information, optimal mechanism can be interpreted as a menu consisting of a price for every slot.
Author : Nicolás Riquelme
Publisher :
ISBN 13 :
Total Pages : 149 pages
Book Rating : 4.:/5 (127 download)
Download or read book Essays on Mechanism Design and Multiple Privately Informed Principals written by Nicolás Riquelme and published by . This book was released on 2019 with total page 149 pages. Available in PDF, EPUB and Kindle. Book excerpt: "This dissertation is a collection of three papers studying both theoretical and applied aspects of mechanism design. In Chapter 1, we study competing auctions where each seller has private information about the quality of his object and chooses the reserve price of a second-price auction. Buyers observe the reserve prices and decide which auction to participate in. For a class of primitives, we show that a perfect Bayesian equilibrium exists for any finite market. In any such PBE, higher quality is signaled through higher reserve price at the expense of trade opportunities. But there might be bunching regions causing inefficiencies. In fact, in the large-market limit characterized by a directed search model, the interaction of adverse selection and search frictions entail distortion at the bottom: when either the buyer-seller ratio is sufficiently large or a regularity condition is met, there is no separating PBE in which the lowest-quality seller sets reserve price equal to his opportunity cost. This finding carries over to large finite markets and is consistent with observed behavior in auctions for used cars in UK (Choi, Nesheim and Rasul, 2016). In Chapter 2, we study games where a group of privately informed principals design mechanisms to a common agent. The agent has private information (exogenous) and, after observing principals' mechanisms, may have information (endogenous) about feasible allocations and private information from each principal. Thus, each principal may be interested in designing a mechanism to screen all this information, for which a potentially complicated message space to convey this information might be needed. In this project, we provide sufficient conditions on the agent's payoff such that any equilibrium in this setup has an output-equivalent equilibrium using only mechanisms with simple message spaces (direct mechanisms). Depending on the conditions, we propose two different notions of direct mechanisms and discuss their applicability with some examples. In Chapter 3, we study the design of horizontal merger regulation in a Cournot competition setting, where firms are privately informed about production technology. More specifically, a consumer-surplus-maximizer regulator designs a mechanism which determines whether the merger is blocked or accepted, and sets structural remedies (divestitures). This problem does not have the usual quasi-linear structure commonly assumed in the mechanism design literature. We first characterize incentive-compatible mechanisms and then find the optimal one. The complete information case is also presented as a benchmark. Asymmetric information induces important distortions in regulatory decisions. First, every rejected merge would improve consumer surplus. Second, every merge that decreases consumer surplus would be approved. Lastly, every merge rightly approved would be asked fewer divestitures than the optimal one (under-fixing effect). These results seem consistent with recent empirical evidence on the ineffectiveness of the merger regulation"--Pages vii-viii.
Author : Marco Reuter
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (138 download)
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:
