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Strategic complementarities and unraveling in matching markets
Echenique, Federico; Pereyra, Juan Sebastián - In: Theoretical Economics 11 (2016) 1, pp. 1-39
We present a theoretical explanation of inefficient early matching in matching markets. Our explanation is based on strategic complementarities and strategic unraveling. We identify a negative externality imposed on the rest of the market by agents who make early offers. As a consequence, an...
Persistent link: https://www.econbiz.de/10011599561
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Maskin meets Abreu and Matsushima
Chen, Yi-chun; Kunimoto, Takashi; Sun, Yifei; Xiong, Siyang - In: Theoretical Economics 17 (2022) 4, pp. 1683-1717
The theory of full implementation has been criticized for using integer/modulo games which admit no equilibrium (Jackson (1992)). To address the critique, we revisit the classical Nash implementation problem due to Maskin (1977, 1999) but allow for the use of lotteries and monetary transfers as...
Persistent link: https://www.econbiz.de/10014536975
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Incentives in matching markets: counting and comparing manipulating agents
Bonkoungou, Somouaoga; Nesterov, Alexander - In: Theoretical Economics 18 (2023) 3, pp. 965-991
Manipulability is a threat to the successful design of centralized matching markets. However, in many applications some manipulation is inevitable and the designer wants to compare manipulable mechanisms. We count the number of agents with an incentive to manipulate and rank mechanisms by their...
Persistent link: https://www.econbiz.de/10014536989
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Voting on multiple issues: What to put on the ballot?
Gershkov, Alex; Moldovanu, Benny; Shi, Xianwen - In: Theoretical Economics 14 (2019) 2, pp. 555-596
We study a multi-dimensional collective decision under incomplete information. Agents have Euclidean preferences and vote by simple majority on each issue (dimension), yielding the coordinate-wise median. Judicious rotations of the orthogonal axes -- the issues that are voted upon -- lead to...
Persistent link: https://www.econbiz.de/10012215324
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Strategic complementarities and unraveling in matching markets
Echenique, Federico; Pereyra, Juan Sebastián - In: Theoretical Economics (2014)
We present a theoretical explanation of inefficient early matching in matching markets. Our explanation is based on strategic complementarities and strategic unraveling. We identify a negative externality imposed on the rest of the market by agents who make early offers. As a consequence, an...
Persistent link: https://www.econbiz.de/10011019210
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Simple contracts with adverse selection and moral hazard
Gottlieb, Daniel; Moreira, Humberto - In: Theoretical Economics 17 (2022) 3, pp. 1357-1401
We study a principal-agent model with moral hazard and adverse selection. Risk-neutral agents with limited liability have arbitrary private information about the distribution of outputs and the cost of effort. We show that under a multiplicative separability condition, the optimal mechanism...
Persistent link: https://www.econbiz.de/10014536927
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Optimal dynamic contracting: The first-order approach and beyond
Battaglini, Marco; Lamba, Rohit - In: Theoretical Economics 14 (2019) 4, pp. 1435-1482
We explore the conditions under which the "first-order approach" (FO-approach) can be used to characterize profit maximizing contracts in dynamic principal-agent models. The FO-approach works when the resulting FO-optimal contract satisfies a particularly strong form of monotonicity in types, a...
Persistent link: https://www.econbiz.de/10012215290
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Regulating a monopolist with uncertain costs without transfers
Amador, Manuel; Bagwell, Kyle - In: Theoretical Economics 17 (2022) 4, pp. 1719-1760
We analyze the Baron and Myerson (1982) model of regulation under the restriction that transfers are infeasible … conditions under which optimal regulation takes the form of price-cap regulation. We establish conditions under which the optimal … these conditions fail. We also provide conditions for the optimality of price-cap regulation when an ex post participation …
Persistent link: https://www.econbiz.de/10014536910
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Collusion and delegation under information control
Asseyer, Andreas - In: Theoretical Economics 15 (2020) 4, pp. 1547-1586
This paper studies how information control affects incentives for collusion and optimal organizational structures in principal-supervisor-agent relationships. I consider a model in which the principal designs the supervisor's signal on the productive agent's private information and the...
Persistent link: https://www.econbiz.de/10013189018
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Secure implementation
Sjostrom, Tomas; Yamato, Takehiko; Saijo, Tatsuyoshi - In: Theoretical Economics 2 (2007) 3, pp. 203-229
Strategy-proofness, requiring that truth-telling be a dominant strategy, is a standard concept in social choice theory. However, this concept has serious drawbacks. In particular, many strategy-proof mechanisms have multiple Nash equilibria, some of which produce the wrong outcome. A possible...
Persistent link: https://www.econbiz.de/10011599388