Essays On Mechanism And Market Design
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Essays In Mechanism And Market Design
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Author : Vasiliki Skreta
language : en
Publisher:
Release Date : 2001
Essays In Mechanism And Market Design written by Vasiliki Skreta and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with categories.
Essays In Mechanism And Market Design
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Author : Kentaro Tomoeda
language : en
Publisher:
Release Date : 2016
Essays In Mechanism And Market Design written by Kentaro Tomoeda and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
This thesis consists of three essays on mechanism and market design.
Essays On Mechanism And Market Design
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Author : Aaron Luke Bodoh-Creed
language : en
Publisher:
Release Date : 2010
Essays On Mechanism And Market Design written by Aaron Luke Bodoh-Creed and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with categories.
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.
Essays In Mechanism Design And Market Design
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Author :
language : en
Publisher:
Release Date : 2014
Essays In Mechanism Design And Market Design written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
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.
Essays On Market Design And Experimental Economics
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Author : Eric Samuel Mayefsky
language : en
Publisher: Stanford University
Release Date : 2011
Essays On Market Design And Experimental Economics written by Eric Samuel Mayefsky and has been published by Stanford University this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.
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.
Essays In Market And Mechanism Design
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Author : Fanqi Shi
language : en
Publisher:
Release Date : 2019
Essays In Market And Mechanism Design written by Fanqi Shi and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
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.
Essays On Mechanism Design In Two Sided Markets
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Author :
language : en
Publisher:
Release Date : 2010
Essays On Mechanism Design In Two Sided Markets written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with categories.
Essays In Market And Mechanism Design
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Author : Marco Reuter
language : en
Publisher:
Release Date : 2023
Essays In Market And Mechanism Design written by Marco Reuter and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023 with categories.
Essays On Market Design And Experimental Economics
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Author : Eric Samuel Mayefsky
language : en
Publisher:
Release Date : 2011
Essays On Market Design And Experimental Economics written by Eric Samuel Mayefsky and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.
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.
Essays On Market Design
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Author :
language : en
Publisher:
Release Date : 2016
Essays On Market Design written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
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