scholarly journals Cream Skimming and Information Design in Matching Markets

2019 ◽  
Vol 11 (2) ◽  
pp. 250-276 ◽  
Author(s):  
Gleb Romanyuk ◽  
Alex Smolin
Keyword(s):  
Calculus Of Variations ◽  
Information Disclosure ◽  
Market Failure ◽  
Information Design ◽  
Full Information ◽  
Matching Markets ◽  
Coarse Information ◽  
Cream Skimming ◽  
Over Time

Short-lived buyers arrive to a platform over time and randomly match with sellers. The sellers stay at the platform and decide whether to accept incoming requests. The platform designs what buyer information the sellers observe before deciding to form a match. We show full information disclosure leads to a market failure because of excessive rejections by the sellers. If sellers are homogeneous, then coarse information policies are able to restore efficiency. If sellers are heterogeneous, then simple censorship policies are often constrained efficient as shown by a method of calculus of variations. (JEL C78, D82, D83)

scholarly journals Classroom Games: A Market for Lemons

1999 ◽  
Vol 13 (1) ◽  
pp. 205-214 ◽  
Author(s):  
Charles A Holt ◽  
Roger Sherman
Keyword(s):  
Asymmetric Information ◽  
Market Failure ◽  
Quality Standards ◽  
Full Information ◽  
Information Market ◽  
Market Outcomes ◽  
Market Prices ◽  
Total Surplus ◽  
Quality Grade ◽  
Low Levels

The incentives that arise in markets with asymmetric information are illustrated in the classroom exercise presented here. Student sellers choose both a quality ‘grade’ and a price for their products. Initially, both prices and grades for all sellers are posted, and buyers select from these offerings. In this full-information setup, the market prices and grades quickly reach efficient levels that maximize total surplus. Next, although sellers continue to choose grades and prices, only prices (not grades) are posted for buyers to see when they shop. The grades and prices then fall to inefficiently low levels. The observed market outcomes in this exercise can stimulate useful discussion of asymmetric information, market failure, and remedies such as quality standards and warranties.

Information Disclosure Model Under Supply Chain Competition with Asymmetric Demand Disruption

2016 ◽  
Vol 33 (06) ◽  
pp. 1650043 ◽  
Author(s):  
Kebing Chen ◽  
Renxing Xu ◽  
Hanwei Fang
Keyword(s):  
Supply Chain ◽  
Asymmetric Information ◽  
Information Disclosure ◽  
Information Structure ◽  
Wholesale Price ◽  
Retail Price ◽  
Supply Side ◽  
Full Information ◽  
Supply Chain Competition ◽  
Information Rent

This paper develops the game models of two symmetric supply chains, each consisting of one manufacturer and one retailer, while both retailers compete in the market with a linear function. The disclosure mechanism is designed when the information of the disrupted demand is asymmetric between supply side and retail side. We first study the model with the full information as a benchmark to explore the effect of asymmetric information on the system. In the case, each manufacturer maximizes her profit while the downstream retailer only obtains the reservation profit. For the case of asymmetric information, each manufacturer can obtain the real information of the disrupted demand by using a menu of contract bundles. For each information structure, there are always robust regions for each manufacturer’s original trading quantity scheme. That is, when the disrupted amount of the demand is sufficiently small, the trading quantity will be unchanged. However, some special measures, e.g., the higher unit wholesale price, should be taken to prevent the retailer from deviating the trading quantity scheme. The high-disruption retailer gets the higher profit due to the information rent. Compared with a single supply chain, Cournot competition results in the less retail price and the lower performance for the whole system.

scholarly journals A cost-efficient face learning mechanism: The impact of stability in appearance on the resolution of facial representations

2021 ◽  
Author(s):  
Christel Devue ◽  
Sofie de Sena ◽  
Jade Wright
Keyword(s):  
Large Scale ◽  
Diagnostic Value ◽  
Learning Mechanism ◽  
Coarse Information ◽  
Reliable Representation ◽  
Cost Efficient ◽  
Recognition Errors ◽  
The Cost ◽  
The Impact ◽  
Over Time

The way faces become familiar and what information is represented as familiarity develops has puzzled researchers in the field of human face recognition for decades. In this paper, we propose a cost-efficient mechanism of face learning to describe how facial representations form over time and that explains why recognition errors occur. Encoding of diagnostic facial information would follow a coarse-to-fine trajectory, modulated by the intrinsic stability in individual faces’ appearance. In four experiments, we draw on a robust and ecological method using a proxy of exposure to famous faces in the real world to test hypotheses generated by the model and we manipulate test images to probe the nature of facial representations. We consistently show that stable facial appearances help create more reliable representation in early stages of familiarisation but that their resolution remains relatively low and therefore less discriminative over time. In contrast, variations in appearance hinder recognition at first but encourage refinement of representations with further exposure. Consistent with the cost-efficient face learning mechanism we propose, facial representations built on a foundation of large-scale coarse information. When coarse information loses its diagnostic value through the experience of variations across encounters, facial details and their spatial relationships receive additional representational weights.

scholarly journals Assistive technology pricing in Australia: is it efficient and equitable?

2018 ◽  
Vol 42 (1) ◽  
pp. 100 ◽  
Author(s):  
Michael P. Summers ◽  
George Verikios
Keyword(s):  
Assistive Technology ◽  
Large Scale ◽  
Market Failure ◽  
Aged Care ◽  
Government Procurement ◽  
Price Comparison ◽  
Retail Prices ◽  
Price Comparisons ◽  
The Right ◽  
Over Time

Objective To examine available systematically collected evidence regarding prices for assistive technology (AT; e.g. disability aids and equipment) in Australia with other comparable countries. Issues of appropriate AT pricing are coming to the fore as a consequence of efforts to move to consumer-centric purchasing decisions with the National Disability Insurance Scheme (NDIS) and also in the recent aged care reforms. Methods We identified and present three sets of AT price comparisons. Two comparisons were based solely on the lowest prices advertised on the internet, and one comparison examined recommended retail prices. Variables essential to ensuring accurate comparisons, as well as significant supply-chain issues were also examined and considered in the analyses. Results The first internet-only price comparison found that overall AT prices were 38% higher in Australia compared to other countries, but did not factor in shipping and other related costs that are essential to include given that most AT is imported. The second internet-only price comparison found that overall Australian prices were 24% lower when shipping and related costs were included. The recommended retail price comparisons found that Australian prices were between 14% and 27% lower. Prices for internet-only retailers (those with no bricks-and-mortar presence) are consistently lower for all products than those sold by retailers with actual shop-fronts. Further, there is no evidence of suppliers earning supranormal profits in Australia. Conclusions The results indicate that AT prices in Australia are efficient and equitable, with no significant indicators of market failure which would require government intervention. Efforts to reduce prices through the excessive use of large-scale government procurement programs are likely to reduce diversity and innovation in AT and raise AT prices over time. Open markets and competition with centralised tracking of purchases and providers to minimise possible over-servicing/over-charging align well with the original intention of the NDIS, and are likely to yield the best outcomes for consumers at the lowest costs. What is known about the topic? Government-funded programs are used extensively to purchase AT because it is a primary enabler for people of all ages with disabilities. Perceptions of unreasonably high prices for AT in Australia are resulting in the widespread adoption of bulk purchasing and related strategies by governments. What does this paper add? Carefully undertaken systematic price comparisons between Australia and comparable Organization For Economic Cooperation and Development countries indicate that, on average, Australian prices are lower than elsewhere when delivery to Australia is taken into account. It was also found that prices at brick-and-mortar shops, with all the services they provide to ensure the appropriateness of the products provided to meet the consumers’ needs and goals, are substantially higher than Internet purchases in which the consumer bears all the risks and responsibilities for outcomes. What are the implications? Overuse of government bulk purchasing and similar arrangements will lead to less diversity in the available AT products, related services and retail outlets, resulting in less choice for consumers and higher risks of poor outcomes through less focus on matching consumers with the ‘right’ products for their needs and goals, and ultimately higher AT prices over time as competition is reduced to a few major suppliers.

Impacts of Auction Settings on the Performance of Truckload Transportation Marketplaces

2005 ◽  
Vol 1906 (1) ◽  
pp. 89-96 ◽  
Author(s):  
Miguel Andres Figliozzi ◽  
Hani S. Mahmassani ◽  
Patrick Jaillet
Keyword(s):  
Information Disclosure ◽  
Time Windows ◽  
Pickup And Delivery ◽  
Hard Time ◽  
Sequential Auction ◽  
Simulation Results ◽  
Over Time

The performance of different sequential auction settings for the procurement of truckload services is compared. In this environment, demands arrive randomly over time and are described by pickup and delivery locations and hard time windows. When loads arrive, carriers compete for their transport. Different auction and information disclosure settings are studied. Learning methodologies are discussed and analyzed. Simulation results are presented.

scholarly journals Dynamic Information Design: A Simple Problem on Optimal Sequential Information Disclosure

2021 ◽  
Author(s):  
Farzaneh Farhadi ◽  
Demosthenis Teneketzis
Keyword(s):  
Markov Chain ◽  
Information Disclosure ◽  
Mixed Strategy ◽  
Transition Probabilities ◽  
Infinite Horizon ◽  
Information Design ◽  
Simple Problem ◽  
Time Varying ◽  
Dynamic Information ◽  
Time Threshold

AbstractWe study a dynamic information design problem in a finite-horizon setting consisting of two strategic and long-term optimizing agents, namely a principal (he) and a detector (she). The principal observes the evolution of a Markov chain that has two states, one “good” and one “bad” absorbing state, and has to decide how to sequentially disclose information to the detector. The detector’s only information consists of the messages she receives from the principal. The detector’s objective is to detect as accurately as possible the time of the jump from the good to the bad state. The principal’s objective is to delay the detector as much as possible from detecting the jump to the bad state. For this setting, we determine the optimal strategies of the principal and the detector. The detector’s optimal strategy is described by time-varying thresholds on her posterior belief of the good state. We prove that it is optimal for the principal to give no information to the detector before a time threshold, run a mixed strategy to confuse the detector at the threshold time, and reveal the true state afterward. We present an algorithm that determines both the optimal time threshold and the optimal mixed strategy that could be employed by the principal. We show, through numerical experiments, that this optimal sequential mechanism outperforms any other information disclosure strategy presented in the literature. We also show that our results can be extended to the infinite-horizon problem, to the problem where the matrix of transition probabilities of the Markov chain is time-varying, and to the case where the Markov chain has more than two states and one of the states is absorbing.

scholarly journals Impact of Voluntary Disclosure on the Relevance of Accounting Information

2012 ◽  
Vol 3 (5) ◽  
pp. 138-153
Author(s):  
Jihene Chedlia Soussi
Keyword(s):  
Voluntary Disclosure ◽  
Information Disclosure ◽  
Accounting Information ◽  
High Technology ◽  
Technology Firms ◽  
High Technology Firms ◽  
Accounting Model ◽  
Book Values ◽  
Over Time

Information disclosure by firms has grown considerably. The increased level of firms’ disclosure has been accompanied by the loss of relevance of accounting information over time (Lev, 1989, Ramech and Thiagarajan, 1995, Lev and Zarowin, 1999, Brown and al, 1999, Chang, 1999 and Chalmers and al, 2011). Our objective is to determine whether the voluntary disclosure explains the low relevance of accounting information. We find that medium-technology companies have the highest level of relevance of accounting information. However, the relevance of the accounting model is low for lowtechnology firms and high technology firms. The introduction of the overall disclosure index and subindexes of disclosure has an effect on the relevance of the accounting model (this effect is significant only in some cases for low-tech firms). Furthermore, the addition of variables of disclosure to the accounting model makes the accounting variables relevant to investors for low-tech firms. For medium-tech firms, book values and earnings are relevant. While, for high technology firms, only the earnings are relevant. We also show that the introduction of intangible expenses, the weight of intangibles and the index of disclosure on intangibles is growing, but not significantly the relevance of the accounting model.

scholarly journals The Effect of Information Feedback in Construction Bidding

1970 ◽  
Vol 10 (1-2) ◽  
pp. 65-75
Author(s):  
Alexander Soo ◽  
Bee Oo
Keyword(s):  
Project Management ◽  
Construction Project ◽  
Feedback Condition ◽  
Information Feedback ◽  
Construction Project Management ◽  
Full Information ◽  
Feedback Information ◽  
Over Time

 With the goal to achieve efficiency in bidding competitions, many codes of bidding procedure recommend clients provide contractors with bidding feedback information. Contractors strive to bid competitively via learning based on their experiences in past bidding attempts. The level of bidding feedback information, however, varies across clients. In many cases, clients do not provide feedback or provide insufficient feedback to contractors. Focussing on two information feedback conditions (full and partial), we examine: (i) the changes in bidding trend over time, and (ii) the effects of bidding feedback information on bidders’ competitiveness in bidding. Data were gathered using a bidding experiment that involved student (inexperienced) bidders with a construction project management background. The results show that the variations in bids over time for full information feedback condition are statistically significant, but not for bids from bidders with partial bidding feedback information. Bidders with full bidding feedback information are more competitive than those with partial bidding feedback information. The findings add to both our theoretical and empirical understanding of construction bidding: an understanding of the process of changes in the price of building work, and how the process can be manipulated through the release of bidding feedback information.

Allocation Problems in Ride-sharing Platforms

2021 ◽  
Vol 9 (3) ◽  
pp. 1-17
Author(s):  
John P. Dickerson ◽  
Karthik A. Sankararaman ◽  
Aravind Srinivasan ◽  
Pan Xu
Keyword(s):  
Adaptive Algorithm ◽  
Competitive Ratio ◽  
Data Driven ◽  
Matching Markets ◽  
Prior Work ◽  
Bipartite Matching ◽  
New Model ◽  
Ride Sharing ◽  
Online Matching ◽  
Over Time

Bipartite-matching markets pair agents on one side of a market with agents, items, or contracts on the opposing side. Prior work addresses online bipartite-matching markets, where agents arrive over time and are dynamically matched to a known set of disposable resources. In this article, we propose a new model, Online Matching with (offline) Reusable Resources under Known Adversarial Distributions ( OM-RR-KAD ) , in which resources on the offline side are reusable instead of disposable; that is, once matched, resources become available again at some point in the future. We show that our model is tractable by presenting an LP-based non-adaptive algorithm that achieves an online competitive ratio of ½-ϵ for any given constant ϵ > 0. We also show that no adaptive algorithm can achieve a ratio of ½ + o (1) based on the same benchmark LP. Through a data-driven analysis on a massive openly available dataset, we show our model is robust enough to capture the application of taxi dispatching services and ride-sharing systems. We also present heuristics that perform well in practice.

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