This paper studies the impact of noisy signals on screening processes. It deals with a decision problem in which a decision-maker screens a set of elements based on noisy unbiased evaluations. Given that the decision-maker uses threshold strategies, we show that additional binary noise can potentially improve a screening, an effect that resembles a “ lucky coin toss.” We compare different noisy signals under threshold strategies and optimal ones, and we provide several characterizations of cases in which one noise is preferable over another. Accordingly so, we establish a novel method to compare noise variables using a contraction mapping between percentiles. (JEL D82)
{"title":"Screening Dominance: A Comparison of Noisy Signals","authors":"David Lagziel, E. Lehrer","doi":"10.1257/mic.20200284","DOIUrl":"https://doi.org/10.1257/mic.20200284","url":null,"abstract":"This paper studies the impact of noisy signals on screening processes. It deals with a decision problem in which a decision-maker screens a set of elements based on noisy unbiased evaluations. Given that the decision-maker uses threshold strategies, we show that additional binary noise can potentially improve a screening, an effect that resembles a “ lucky coin toss.” We compare different noisy signals under threshold strategies and optimal ones, and we provide several characterizations of cases in which one noise is preferable over another. Accordingly so, we establish a novel method to compare noise variables using a contraction mapping between percentiles. (JEL D82)","PeriodicalId":47467,"journal":{"name":"American Economic Journal-Microeconomics","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49142340","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study the limits of dynamic electoral accountability when voters are uncertain about politicians’ characteristics (adverse selection) and their actions (moral hazard). Existing work argues that voters cannot achieve their first-best payoff. This is attributed to inherent deficiencies of the electoral contract, including voters’ inability to precommit, and the restriction to a binary retention-replacement decision. We provide conditions under which voters can, despite these constraints, obtain arbitrarily close to the first-best payoff in an equilibrium of the electoral interaction. Our paper resolves that there need not be a trade-off between selection and control. (JEL D72, D82)
{"title":"Making Elections Work: Accountability with Selection and Control","authors":"Vincent Anesi, Peter Buisseret","doi":"10.1257/mic.20200311","DOIUrl":"https://doi.org/10.1257/mic.20200311","url":null,"abstract":"We study the limits of dynamic electoral accountability when voters are uncertain about politicians’ characteristics (adverse selection) and their actions (moral hazard). Existing work argues that voters cannot achieve their first-best payoff. This is attributed to inherent deficiencies of the electoral contract, including voters’ inability to precommit, and the restriction to a binary retention-replacement decision. We provide conditions under which voters can, despite these constraints, obtain arbitrarily close to the first-best payoff in an equilibrium of the electoral interaction. Our paper resolves that there need not be a trade-off between selection and control. (JEL D72, D82)","PeriodicalId":47467,"journal":{"name":"American Economic Journal-Microeconomics","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43818237","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper provides evidence of rational inattention by experienced professionals in strategic interactions. We add rational inattention to a game of matching pennies with state-dependent payoffs. Unlike the full-information, mixed-strategy Nash equilibrium, payoffs of different actions need not be equated state by state. Moreover, players respond partially to payoff differences, this responsiveness is stronger when attention costs are lower, strategies converge to full-information Nash as stakes increase, and average payoffs across all states are approximately equal across actions. We test these predictions using data on millions of pitches from Major League Baseball, where we observe strategies, payoffs, and proxies for attention costs. (JEL C72, D83, D91, L83, Z21)
本文提供了经验丰富的专业人员在战略互动中理性忽视的证据。我们将理性的不注意加入到一场将便士与依赖国家的收益相匹配的游戏中。与全信息混合策略纳什均衡不同，不同行为的收益不需要逐个状态地等同。此外，玩家对收益差异做出部分反应，当注意力成本较低时，这种反应更强，当赌注增加时，策略收敛于全信息纳什，所有状态下的平均收益在行动中大致相等。我们使用来自美国职业棒球大联盟(Major League Baseball)的数百万个球场的数据来测试这些预测，在那里我们观察了策略、回报和注意力成本的代理。(jel c72, d83, d91, l83, z21)
{"title":"Rational Inattention in the Infield","authors":"Vivek Bhattacharya, Greg Howard","doi":"10.1257/mic.20200310","DOIUrl":"https://doi.org/10.1257/mic.20200310","url":null,"abstract":"This paper provides evidence of rational inattention by experienced professionals in strategic interactions. We add rational inattention to a game of matching pennies with state-dependent payoffs. Unlike the full-information, mixed-strategy Nash equilibrium, payoffs of different actions need not be equated state by state. Moreover, players respond partially to payoff differences, this responsiveness is stronger when attention costs are lower, strategies converge to full-information Nash as stakes increase, and average payoffs across all states are approximately equal across actions. We test these predictions using data on millions of pitches from Major League Baseball, where we observe strategies, payoffs, and proxies for attention costs. (JEL C72, D83, D91, L83, Z21)","PeriodicalId":47467,"journal":{"name":"American Economic Journal-Microeconomics","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47178360","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We consider a two-stage contest, in which only a subset of contestants enters the finale. We explore the optimal policy for disclosing contestants’ interim status after the preliminary round, i.e., their interim ranking and elimination decision. The optimum depends on the design objective. We fully characterize the conditions under which disclosure or concealment emerges as the optimum. We further allow the organizer to bias the competition based on finalists’ interim rankings, which endogenizes the dynamic structure of the contest. Concealment outperforms in generating total effort, while disclosure prevails when maximizing the expected winner’s total effort. (JEL C72, L22)
{"title":"Disclosure and Favoritism in Sequential Elimination Contests","authors":"Qiang Fu, Zenan Wu","doi":"10.1257/mic.20200230","DOIUrl":"https://doi.org/10.1257/mic.20200230","url":null,"abstract":"We consider a two-stage contest, in which only a subset of contestants enters the finale. We explore the optimal policy for disclosing contestants’ interim status after the preliminary round, i.e., their interim ranking and elimination decision. The optimum depends on the design objective. We fully characterize the conditions under which disclosure or concealment emerges as the optimum. We further allow the organizer to bias the competition based on finalists’ interim rankings, which endogenizes the dynamic structure of the contest. Concealment outperforms in generating total effort, while disclosure prevails when maximizing the expected winner’s total effort. (JEL C72, L22)","PeriodicalId":47467,"journal":{"name":"American Economic Journal-Microeconomics","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43857166","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
How should law enforcement resources be allocated to minimize the harms from flexible, chain-form trafficking organizations? I show that optimal interventions focus on one target, the feeding source (decapitation) or the revenue-generating tail (amputation). Decapitation dismantles the crime chain under large budgets but induces maximal expansion otherwise, whereas amputation generates a rich set of detection outcomes and limits the chain’s size response. A rule of thumb emerges for authorities to target tail segments under small budgets and high detection contiguity, qualified by chain profitability and enforcement parameters. Real-world interventions fail to coordinate on such efficient targeting. (JEL K42)
{"title":"Crime Chains","authors":"M. Baç","doi":"10.1257/mic.20200314","DOIUrl":"https://doi.org/10.1257/mic.20200314","url":null,"abstract":"How should law enforcement resources be allocated to minimize the harms from flexible, chain-form trafficking organizations? I show that optimal interventions focus on one target, the feeding source (decapitation) or the revenue-generating tail (amputation). Decapitation dismantles the crime chain under large budgets but induces maximal expansion otherwise, whereas amputation generates a rich set of detection outcomes and limits the chain’s size response. A rule of thumb emerges for authorities to target tail segments under small budgets and high detection contiguity, qualified by chain profitability and enforcement parameters. Real-world interventions fail to coordinate on such efficient targeting. (JEL K42)","PeriodicalId":47467,"journal":{"name":"American Economic Journal-Microeconomics","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48318101","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
XiaoGang Che, Tong Li, Jingfeng Lu, Xiaoyong Zheng
We examine optimal auction design when buyers may receive future outside offers. The winning bidder may choose to default upon observing her outside offer. Under the optimal mechanism, the bidder with the highest value wins if and only if her value is above a cutoff, and the winner never defaults. The optimal auction takes the form of a second-price auction with a reserve price and a deposit by the winning bidder. Under regularity conditions, both the optimal reserve price and the deposit increase when the distribution of outside offers worsens. (JEL D44, D82)
{"title":"Deposit Requirements in Auctions","authors":"XiaoGang Che, Tong Li, Jingfeng Lu, Xiaoyong Zheng","doi":"10.1257/mic.20200206","DOIUrl":"https://doi.org/10.1257/mic.20200206","url":null,"abstract":"We examine optimal auction design when buyers may receive future outside offers. The winning bidder may choose to default upon observing her outside offer. Under the optimal mechanism, the bidder with the highest value wins if and only if her value is above a cutoff, and the winner never defaults. The optimal auction takes the form of a second-price auction with a reserve price and a deposit by the winning bidder. Under regularity conditions, both the optimal reserve price and the deposit increase when the distribution of outside offers worsens. (JEL D44, D82)","PeriodicalId":47467,"journal":{"name":"American Economic Journal-Microeconomics","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42425144","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Sequentiality of moves in an infinitely repeated prisoner’s dilemma does not change the conditions under which mutual cooperation can be supported in equilibrium relative to simultaneous decision-making. The nature of the interaction is different, however, given that sequential play reduces strategic uncertainty. We show in an experiment that this has large consequences for behavior. We find that with intermediate incentives to cooperate, sequentiality increases the cooperation rate by around 40 percentage points, whereas with very low or very high incentives to cooperate, cooperation rates are respectively very low or very high in both settings. (JEL C72, C73)
{"title":"The Effect of Sequentiality on Cooperation in Repeated Games","authors":"Riccardo Ghidoni, S. Suetens","doi":"10.1257/mic.20200268","DOIUrl":"https://doi.org/10.1257/mic.20200268","url":null,"abstract":"Sequentiality of moves in an infinitely repeated prisoner’s dilemma does not change the conditions under which mutual cooperation can be supported in equilibrium relative to simultaneous decision-making. The nature of the interaction is different, however, given that sequential play reduces strategic uncertainty. We show in an experiment that this has large consequences for behavior. We find that with intermediate incentives to cooperate, sequentiality increases the cooperation rate by around 40 percentage points, whereas with very low or very high incentives to cooperate, cooperation rates are respectively very low or very high in both settings. (JEL C72, C73)","PeriodicalId":47467,"journal":{"name":"American Economic Journal-Microeconomics","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49525566","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study a dynamic equilibrium search model where sellers differ in their urgency to liquidate an asset. Buyers strategically make price offers without knowing a given seller’s urgency. We study liquidity and price dynamics on the transition path after an unexpected shock. Generically, the transition includes a phase where all buyers offer the same price, causing a market collapse; however, price dispersion resumes in finite time, leading to a recovery where both types make sales. We show that prices and liquidity can overshoot before converging to the steady state. When relaxed sellers randomly become desperate, dampening oscillations can occur. (JEL C73, D11, D83)
{"title":"Transition Dynamics in Equilibrium Search","authors":"Ş. Akın, Brennan C. Platt","doi":"10.1257/mic.20200227","DOIUrl":"https://doi.org/10.1257/mic.20200227","url":null,"abstract":"We study a dynamic equilibrium search model where sellers differ in their urgency to liquidate an asset. Buyers strategically make price offers without knowing a given seller’s urgency. We study liquidity and price dynamics on the transition path after an unexpected shock. Generically, the transition includes a phase where all buyers offer the same price, causing a market collapse; however, price dispersion resumes in finite time, leading to a recovery where both types make sales. We show that prices and liquidity can overshoot before converging to the steady state. When relaxed sellers randomly become desperate, dampening oscillations can occur. (JEL C73, D11, D83)","PeriodicalId":47467,"journal":{"name":"American Economic Journal-Microeconomics","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42327385","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study how parliaments and committees select one out of several alternatives when options cannot be ordered along a “left-right” axis. Which voting agendas are used in practice, and how should they be designed? We assume that preferences are single peaked on a tree and study convex agendas where, at each stage in the voting process, the tree of remaining alternatives is divided into two subtrees that are subjected to a Yes-No vote. We show that strategic voting coincides with sincere, unsophisticated voting. Based on inference results and revealed preference arguments, we illustrate the empirical implications for two case studies. (JEL D71, D72, F15, J13, J16)
{"title":"Voting Agendas and Preferences on Trees: Theory and Practice","authors":"Andreas Kleiner, B. Moldovanu","doi":"10.1257/mic.20200147","DOIUrl":"https://doi.org/10.1257/mic.20200147","url":null,"abstract":"We study how parliaments and committees select one out of several alternatives when options cannot be ordered along a “left-right” axis. Which voting agendas are used in practice, and how should they be designed? We assume that preferences are single peaked on a tree and study convex agendas where, at each stage in the voting process, the tree of remaining alternatives is divided into two subtrees that are subjected to a Yes-No vote. We show that strategic voting coincides with sincere, unsophisticated voting. Based on inference results and revealed preference arguments, we illustrate the empirical implications for two case studies. (JEL D71, D72, F15, J13, J16)","PeriodicalId":47467,"journal":{"name":"American Economic Journal-Microeconomics","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42487006","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-10-10DOI: 10.35429/jm.2022.11.6.1.13
Gregorio Daniel GONZALEZ-REYNA, J. Pérez-Bravo, Sandra Adriana CAMACHO-MOTA
This article sets out by way of introduction the existing problem that gives rise to the research, the background and the objective, being this: To inform how Gameplay Streaming has become a way to generate income and the impact it has during the 2020 - 2021 pandemic in Mexico, knowing the resources and initial investment needed to install a Set up gamer and become a content creator in one or more of the different Streaming platforms; The type of documentary research with explanatory and descriptive qualitative design was used; as a theoretical framework, the topics involved in the research are briefly described, thus arriving at the results which highlight the initial investment required of a Streamer to install the set up and be able to perform Gameplay Streaming. Finding that various authors agree with the results found and concluding that this phenomenon has had an exponential growth during the years of pandemic, so it is a hobby that becomes an attractive and innovative way as a source of income, resulting in the basic investment in the assembly of the Set-up gamer not very expensive.
{"title":"Set up gamer for gameplay streamer in Mexico, required investment and growth during the 2019 pandemic","authors":"Gregorio Daniel GONZALEZ-REYNA, J. Pérez-Bravo, Sandra Adriana CAMACHO-MOTA","doi":"10.35429/jm.2022.11.6.1.13","DOIUrl":"https://doi.org/10.35429/jm.2022.11.6.1.13","url":null,"abstract":"This article sets out by way of introduction the existing problem that gives rise to the research, the background and the objective, being this: To inform how Gameplay Streaming has become a way to generate income and the impact it has during the 2020 - 2021 pandemic in Mexico, knowing the resources and initial investment needed to install a Set up gamer and become a content creator in one or more of the different Streaming platforms; The type of documentary research with explanatory and descriptive qualitative design was used; as a theoretical framework, the topics involved in the research are briefly described, thus arriving at the results which highlight the initial investment required of a Streamer to install the set up and be able to perform Gameplay Streaming. Finding that various authors agree with the results found and concluding that this phenomenon has had an exponential growth during the years of pandemic, so it is a hobby that becomes an attractive and innovative way as a source of income, resulting in the basic investment in the assembly of the Set-up gamer not very expensive.","PeriodicalId":47467,"journal":{"name":"American Economic Journal-Microeconomics","volume":"37 1","pages":""},"PeriodicalIF":2.4,"publicationDate":"2022-10-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79932435","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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