Review of Economic Design最新文献

As other European countries, Spain has experienced a turmoil in which new political parties emerged with force after the global financial crisis in 2008. In this context, we analyze whether the empirical implications of the opportunistic and partisan theories, as well as the Uncertain Information Hypothesis, are met in the Spanish stock market, considering the size and the industry of the companies. The horizon of our study takes into account the seven general elections, 24 regional elections and 4 European elections held from 2002 to 2019, period in which Spain is fully integrated in the economic and monetary union and under the macroeconomic imbalance procedure. Our results do not support the opportunistic and partisan theories, or the Uncertain Information Hypothesis. Our evidence suggests that the short-term negative market reaction to the general elections is linked to the uncertainty with a change in the political sign of the incumbent. Besides, it is not related to size or industry characteristics.

In the context of the matching-with-contracts model, we generalize the cumulative offer process to allow for arbitrary subsets of doctors to make proposals in each round. We show that, under a condition on the hospitals’ choice functions, the outcome of this generalized cumulative offer process is independent of the sets of doctors making proposals in each round. The flexibility of the resulting model allows it to be used to describe different dynamic processes and their final outcomes.

This paper studies contests with complementary prizes where each agent simultaneously distributes a fixed budget over multiple battlefields. Each battlefield has a single prize which is divided among the competitors in proportion to an arbitrary power function of their investment levels. A unique pure strategy Nash equilibrium is shown to exist under arbitrarily sensitive battlefield success functions if objective functions exhibit constant subunitary elasticity of substitution between prize shares. In contrast, Blotto contests with linear objectives have only mixed strategy Nash equilibria if battlefield success functions are sufficiently sensitive to investment levels. Sufficient complementarity between prize shares allows pure strategy Nash equilibria to exist under arbitrarily sensitive battlefield success functions.

This paper studies an optimal assignment problem of heterogenous students to schools with a particular kind of preference complementarity: peer effects, defined by the average ability of those in the same school. The tractability of the problem allows us to characterize the optimal assignment mechanism, which has a simple “(stochastic) pass-fail” structure. Its shape is mainly determined by the convexity/concavity of the attainment function, interpreted as the preference for/against having diverse-ability students in different schools. We also provide comparative statics as to when more or less mixture of heterogenous ability types would be desirable.

We propose a new algorithm in the two-sided marriage market wherein both sides of the market propose in each round. The algorithm always yields a stable matching. Moreover, the outcome is a Rawlsian stable matching if the number of men and women is equal. Lastly, the algorithm can be computed in polynomial time and, from a practical standpoint, can be used in markets where fairness considerations are important.

Consider a single-unit auction with resale and two risk neutral bidders. The ranking of the valuations is known to both the bidders—that is, the bidders know the identity of the highest and lowest valuation bidders. We show that, when the value-rankings are revealed, the classic result of “bid symmetrization” does not hold. Surprisingly, the bidder with the lowest valuation produces a stronger bid distribution than the bidder with the highest valuation. We also show that the revelation of value-rankings in auctions with resale asymmetrizes the bidding strategies. Finally, for a special family of probability distributions, we show that the first-price auction is revenue superior to the second-price auction.

Should a social program be run at a higher or lower level of government? We consider a government-run program supplying a private good to consumers. We focus on a tradeoff between the advantage of a high level of government in resource allocation and its disadvantage in consumer information. We look into the effect of differences in income levels, marginal costs, and preferences on the organization of public governance. One general conclusion is that when regional differences are large, the central government should be in charge; otherwise, local governments should be in charge.

In this paper, we study the problem of solvability for task allocation with unqualified agents (TAU) priority structures proposed by Ehlers and Westkamp (Theor Econ 13:1009-1041, 2018). In the TAU priority structure, at any position, either all agents have equal priority, or there exists exactly one agent who has the lowest priority and all others have equal highest priority. A priority structure is solvable if it admits a constrained efficient and strategy-proof mechanism, where a constrained efficient mechanism always produces a stable matching which can not be Pareto dominated by any other stable matching. We show that TAU priority structures with three agents are solvable via a top trading cycles mechanism with endogenous tie-breaking rules.

Which is better for a firm, job rotation or specialization, can be considered as an endogenously formed worker-indivisible job matching problem. We model this problem as a firm’s profit maximization problem under uncertainty, with and without overlapping generations. In both models, we show that among all possible job allocations, the rotation and specialization schemes are the only variations that can be optimal in terms of profits. Moreover, the rotation scheme is better when the productivity difference between post- and under-training workers is smaller, the uncertainty about job continuation in the future is more significant, or the slope of seniority wages is larger. The results indicate that firms in different environments prefer different worker-job matchings.

This paper analyzes capacity restricted cooperative purchasing (CRCP) situations in which a group of cooperating purchasers face two suppliers with limited supply capacity. To minimize the total purchasing costs, we show that two extreme policies have to be compared: order everything at one supplier and the possible remainder at the other. Interestingly, as order quantities increase, various policy switches can occur. To find suitable cost allocations of the total purchasing costs, we model a CRCP-situation as a cost sharing problem. As increasing order quantities also imply concavity breaks due to a forced change in supplier, the corresponding cost function is piecewise concave. For cost sharing problems with concave cost functions, we show that the serial cost sharing mechanism satisfies two desirable properties, unit cost monotonicity (UCM) and monotonic vulnerability for the absence of the smallest player (MOVASP). However, these properties are lost in the setting of piecewise concave cost functions. We develop a new context specific class of piecewise serial rules based on claims rules. We show that the proportional rule is the only claims rule for which the corresponding piecewise serial rule satisfies UCM. Moreover, the piecewise serial rule corresponding to the constrained equal losses rule satisfies MOVASP.