Economics - Research Publications
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ItemTwo-sided allocation problems, decomposability, and the impossibility of efficient trade(Elsevier, 2019-01-01)Previous literature has shown that private information is a transaction cost that prevents efficient reallocation in two-sided setups with bilateral trade or homogeneous goods. We derive conditions under which the impossibility of efficient trade extends to rich environments in which buyers and sellers have multi-dimensional private types, accommodating many-to-many trades and heterogeneous objects. If agents can be decomposed into unit constituents, the allocation problem can be represented as an assignment game and impossibility obtains through a generalization of Shapley's (1962) result that buyers and sellers are complements. We introduce a general family of payoff functions that ensures decomposability and thus impossibility.
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ItemA general noncentral hypergeometric distribution(Marcel Dekker Inc., 2017)We construct a general non-central hypergeometric distribution, which models biased sampling without replacement. Our distribution is constructed from the combined order statistics of two samples: one of independent and identically distributed random variables with absolutely continuous distribution F and the other of independent and identically distributed random variables with absolutely continuous distribution G. The distribution depends on F and G only through F○G( − 1) (F composed with the quantile function of G), and the standard hypergeometric distribution and Wallenius’ non-central hypergeometric distribution arise as special cases. We show in efficient economic markets the quantity traded has a general non-central hypergeometric distribution.
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ItemClub good intermediaries(Elsevier BV, 2017-01)The emergence and ubiquitous presence in everyday life of digital goods such as songs, movies, and e-books give renewed salience to the problem of providing public goods with exclusion. Because digital goods are typically traded via intermediaries like iTunes, Amazon, and Netflix, the question arises as to the optimal pricing mechanism for such club good intermediaries. We derive the direct Bayesian optimal mechanism for allocating club goods when the mechanism designer is an intermediary that neither produces nor consumes the goods, and we develop an indirect mechanism that implements this mechanism. We also derive sufficient conditions for the intermediary-optimal mechanism to be implementable with revenue sharing contracts, which are widely used in e-business.
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ItemAuctions with bid credits and resale(ELSEVIER SCIENCE BV, 2017-11)
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ItemInefficient policies and incumbency advantage(Elsevier, 2010)We present a model of (re)elections in which an incumbency advantage arises because the incumbent can manipulate issue salience by choosing inefficient policies in the policy dimension in which he is the stronger candidate. The voters are uncertain about the state of the world and the incumbent's choice of policy. Under complete information they would reelect the incumbent if and only if the state is sufficiently high. Undesirable policy outcomes may be due to either a bad state or the incumbent's choice of inefficient policies. The incumbent uses inefficient policies in intermediate states, whereby he creates uncertainty about the true state in such a way that voters are better off in expectation reelecting him. Hence the equilibrium exhibits an incumbency advantage that stems from asymmetric information and the use of inefficient policies.