Lotteries, Sunspots, and Incentive Constraints
... additional incentive compatible gains to trade that are not realized when trading in insurance contracts is prohibited. Suppose, more generally, that households trade goods contingent on announcements. No household will ever deliver a bundle that is not incentive compatible. Every household knows th ...
... additional incentive compatible gains to trade that are not realized when trading in insurance contracts is prohibited. Suppose, more generally, that households trade goods contingent on announcements. No household will ever deliver a bundle that is not incentive compatible. Every household knows th ...
The Simple Economics of Approximately Optimal Auctions
... Approach. We focus on service constrained environments where, in any outcome the mechanism produces, each agent is either considered served or unserved. The designer has a feasibility constraint that governs which subset of agents can be simultaneously served, but the other aspects of the outcome, e ...
... Approach. We focus on service constrained environments where, in any outcome the mechanism produces, each agent is either considered served or unserved. The designer has a feasibility constraint that governs which subset of agents can be simultaneously served, but the other aspects of the outcome, e ...
Alger Weibull 2016
... is that each player’s strategy set be a compact and convex set in some normed vector space. We define a goal function to be evolutionarily stable against another goal function if, in every (Bayesian) Nash equilibrium in every population state where the latter goal function is sufficiently rare, individ ...
... is that each player’s strategy set be a compact and convex set in some normed vector space. We define a goal function to be evolutionarily stable against another goal function if, in every (Bayesian) Nash equilibrium in every population state where the latter goal function is sufficiently rare, individ ...
iese07 VanZandt 5034778 en
... We prove the existence of a greatest and a least interim pure-strategy Bayesian Nash equilibrium for supermodular games of incomplete information. Here is a summary of the main result. Consider the following: • The interim formulation of a Bayesian game, with type spaces and with each individual’s b ...
... We prove the existence of a greatest and a least interim pure-strategy Bayesian Nash equilibrium for supermodular games of incomplete information. Here is a summary of the main result. Consider the following: • The interim formulation of a Bayesian game, with type spaces and with each individual’s b ...
Monopoly Regulation under Asymmetric Information: Prices vs
... The first formalization of the “prices versus quantities” comparison is made by Weitzman (1974), who argues that the comparative advantage of one instrument over the other is far from obvious when there are informational problems.2 He considered settings in which firms are price takers, and thus his ...
... The first formalization of the “prices versus quantities” comparison is made by Weitzman (1974), who argues that the comparative advantage of one instrument over the other is far from obvious when there are informational problems.2 He considered settings in which firms are price takers, and thus his ...
The Boolean formula value problem is in ALOGTIME
... N C 2 . Another early significant result on this problem was due to Spira [17] who showed that for every formula of size n, there is an equivalent formula of size O(n2 ) and depth O(log n). An improved construction, which also applied to the evaluation of rational expressions, was obtained by Brent ...
... N C 2 . Another early significant result on this problem was due to Spira [17] who showed that for every formula of size n, there is an equivalent formula of size O(n2 ) and depth O(log n). An improved construction, which also applied to the evaluation of rational expressions, was obtained by Brent ...
Economic game theory for mutualism and cooperation
... (irrespective of being bad or good) or Ôaccept only if good quality.Õ For this example, let the frequency of good quality agents be ½. Black circles show a playerÕs move; the principal moves first. Open circles show the payoffs to principal (P, top) and agent (A, bottom). Arrows show increases in pa ...
... (irrespective of being bad or good) or Ôaccept only if good quality.Õ For this example, let the frequency of good quality agents be ½. Black circles show a playerÕs move; the principal moves first. Open circles show the payoffs to principal (P, top) and agent (A, bottom). Arrows show increases in pa ...
Competing Mechanisms with Multi
... 1, then ( ) is uniquely defined. It is easy to see that this mechanism is continuous in and is incentive compatible. The class of allowable mechanisms, , is fairly broad. However, is far from completely general. Consumers are reporting their valuation-types, but not their full type which ...
... 1, then ( ) is uniquely defined. It is easy to see that this mechanism is continuous in and is incentive compatible. The class of allowable mechanisms, , is fairly broad. However, is far from completely general. Consumers are reporting their valuation-types, but not their full type which ...
Boundedly Rational Nash Equilibrium: A
... Boundedly rational decision, that is, decisions by agents who imperfectly optimize, has been of interest for nearly half a century as evidenced by such work as Alchian Ž1950., Simon Ž1957., Winter Ž1964., and Nelson and Winter Ž1982.. The great recent interest in and explosion of research in evoluti ...
... Boundedly rational decision, that is, decisions by agents who imperfectly optimize, has been of interest for nearly half a century as evidenced by such work as Alchian Ž1950., Simon Ž1957., Winter Ž1964., and Nelson and Winter Ž1982.. The great recent interest in and explosion of research in evoluti ...
intrinsic
... • The cost to an agent is the sum of the costs of the resources r in s used by the agent when choosing s • The cost of a resource is a function of the number of agents using the resource fr(# agents) ...
... • The cost to an agent is the sum of the costs of the resources r in s used by the agent when choosing s • The cost of a resource is a function of the number of agents using the resource fr(# agents) ...
From Nash to Cournot–Nash equilibria via the Monge–Kantorovich
... A Nash equilibrium in mixed strategies then is a Nash equilibrium for the mixed strategy extension of the game. Because, as soon as the strategy spaces are metric compact spaces, this extension satisfies the continuity and convexity assumptions of theorem 2.2, Nash’s second fundamental result states ...
... A Nash equilibrium in mixed strategies then is a Nash equilibrium for the mixed strategy extension of the game. Because, as soon as the strategy spaces are metric compact spaces, this extension satisfies the continuity and convexity assumptions of theorem 2.2, Nash’s second fundamental result states ...
OPTIMAL AUCTION DESIGN*t - Computer Science
... might have some special information about the intrinsic quality of the object (he might know if the painting is an old master or a copy). We may refer to these two factors as preference uncertainty and quality uncertainty.^ This distinction is very important. If there are only preference uncertainti ...
... might have some special information about the intrinsic quality of the object (he might know if the painting is an old master or a copy). We may refer to these two factors as preference uncertainty and quality uncertainty.^ This distinction is very important. If there are only preference uncertainti ...
ESSAYS ON ENDOGENOUS TIME PREFERENCE AND
... We adopt the non-cooperative open loop Nash equilibrium concept, in which players choose their strategies as simple time functions and they are able to commit themselves to time paths as equilibrium strategies. In this setup, agents choose their strategies simultaneously and face with a single crite ...
... We adopt the non-cooperative open loop Nash equilibrium concept, in which players choose their strategies as simple time functions and they are able to commit themselves to time paths as equilibrium strategies. In this setup, agents choose their strategies simultaneously and face with a single crite ...
Walrasian Analysis via Two-Player Games
... However, it is important to remark that we require the coefficients αi to be strictly positive for every agent forming the coalition. If we consider (as in the original definition by Aubin) the possibility of null weights or contributions, the coalition formed by all the agents (the society) contain ...
... However, it is important to remark that we require the coefficients αi to be strictly positive for every agent forming the coalition. If we consider (as in the original definition by Aubin) the possibility of null weights or contributions, the coalition formed by all the agents (the society) contain ...
Incentivizing Exploration - Cornell Computer Science
... promote stories or pages of interest to their readers, typically rely on readers themselves to discover and share interesting stories, and to rate stories of which they are aware. While individuals may a priori prefer to read stories that have already been rated highly by many others, to discover ne ...
... promote stories or pages of interest to their readers, typically rely on readers themselves to discover and share interesting stories, and to rate stories of which they are aware. While individuals may a priori prefer to read stories that have already been rated highly by many others, to discover ne ...
Vickrey Auction
... This type of auction is strategically similar to an English auction, and gives bidders an incentive to bid their true value. Vickrey's original paper considered only auctions where a single, indivisible good is being sold. In this case, the terms Vickrey auction and second-price sealed-bid auction a ...
... This type of auction is strategically similar to an English auction, and gives bidders an incentive to bid their true value. Vickrey's original paper considered only auctions where a single, indivisible good is being sold. In this case, the terms Vickrey auction and second-price sealed-bid auction a ...
Extensive Form - London School of Economics
... take beliefs about probabilities used by other players calculate expected payoff as function of these and one’s own probabilities find response of expected payoff to one’s own probability compute reaction correspondence take each agent’s reaction correspondence find equilibrium from intersection of ...
... take beliefs about probabilities used by other players calculate expected payoff as function of these and one’s own probabilities find response of expected payoff to one’s own probability compute reaction correspondence take each agent’s reaction correspondence find equilibrium from intersection of ...
Modeling infinitely many agents
... many agents. This condition requires that for any nontrivial collection of agents, when the agent space and the characteristic type space are restricted to such a collection, the former contains the latter strictly in terms of measure spaces. We will demonstrate that the nowhere equivalence conditi ...
... many agents. This condition requires that for any nontrivial collection of agents, when the agent space and the characteristic type space are restricted to such a collection, the former contains the latter strictly in terms of measure spaces. We will demonstrate that the nowhere equivalence conditi ...
A Dynamic Model of Network Formation
... form and sever links. We determine which network structures the formation process will converge to. This information allows us to determine whether or not the formation process will converge to an efficient network structure. Specifically, we show that the formation process is path dependent, and th ...
... form and sever links. We determine which network structures the formation process will converge to. This information allows us to determine whether or not the formation process will converge to an efficient network structure. Specifically, we show that the formation process is path dependent, and th ...
Dual Track Reforms: With and Without Losers
... distortions. Given that the dual track reform represents a Pareto improvement only upon the pre reform allocation, the dynamic welfare effects of anticipated dual track liberalization as compared to having no reform at all are in general ambiguous. This ambiguity will instead not arise in centrally ...
... distortions. Given that the dual track reform represents a Pareto improvement only upon the pre reform allocation, the dynamic welfare effects of anticipated dual track liberalization as compared to having no reform at all are in general ambiguous. This ambiguity will instead not arise in centrally ...
Continuous Time Contests with Private Information
... perfect equilibria and find that the effort of the leader increases in his lead up to some threshold above which the laggard resigns. More general results on the existence of Markov perfect -equilibria in two-player stopping games with complete information are provided in Laraki, Solan, and Vieille ...
... perfect equilibria and find that the effort of the leader increases in his lead up to some threshold above which the laggard resigns. More general results on the existence of Markov perfect -equilibria in two-player stopping games with complete information are provided in Laraki, Solan, and Vieille ...
Matching - Stanford University
... I.B. Two-sided and One-sided matching markets Labor markets, like the market for new doctors, are usually modeled as two-sided markets, in which agents on one side of the market (workers) need to be matched with agents on the other side (employers), and each agent has preferences over possible match ...
... I.B. Two-sided and One-sided matching markets Labor markets, like the market for new doctors, are usually modeled as two-sided markets, in which agents on one side of the market (workers) need to be matched with agents on the other side (employers), and each agent has preferences over possible match ...
Persistent Private Information - University of Wisconsin–Madison
... One particular difference is that given the risk neutrality they can define cash flows, their source of private information, as increments of a Brownian motion with constant drift. Thus private information in their case is i.i.d. However in my environment it is more natural, and more consistent with ...
... One particular difference is that given the risk neutrality they can define cash flows, their source of private information, as increments of a Brownian motion with constant drift. Thus private information in their case is i.i.d. However in my environment it is more natural, and more consistent with ...
Download paper (PDF)
... On the methodological side, we are inspired by Herbert Simon’s emphasis on being explicit about cognitive assumptions. We categorize the existing literature on the basis of the constraints that makes coordination costly or impossible. In section 2 we begin with the model that has guided scholars in ...
... On the methodological side, we are inspired by Herbert Simon’s emphasis on being explicit about cognitive assumptions. We categorize the existing literature on the basis of the constraints that makes coordination costly or impossible. In section 2 we begin with the model that has guided scholars in ...
Lecture Notes on Adverse Selection and Signaling
... Step 1: We first show that the wage offered by both firms must be the same and both firms must be hiring in any SPNE. To this end, note that if both firms are not attracting any worker (i.e, max(w1 , w2 ) < r(θ)) then any firm can make positive payoff by offering an wage w ∗ − ǫ for some ǫ > 0 since ...
... Step 1: We first show that the wage offered by both firms must be the same and both firms must be hiring in any SPNE. To this end, note that if both firms are not attracting any worker (i.e, max(w1 , w2 ) < r(θ)) then any firm can make positive payoff by offering an wage w ∗ − ǫ for some ǫ > 0 since ...