Sequential Preference Revelation in Incomplete Information Settings

2021 ◽  
Vol 13 (1) ◽  
pp. 116-147
Author(s):  
James Schummer ◽  
Rodrigo A. Velez
Keyword(s):  
Incomplete Information ◽  
Real World ◽  
Private Information ◽  
Allocation Rules ◽  
Is Strategy ◽  
Strategy Proof ◽  
Simultaneous Move

Strategy-proof allocation rules incentivize truthfulness in simultaneous move games, but real world mechanisms sometimes elicit preferences sequentially. Surprisingly, even when the underlying rule is strategy-proof and nonbossy, sequential elicitation can yield equilibria where agents have a strict incentive to be untruthful. This occurs only under incomplete information, when an agent anticipates that truthful reporting would signal false private information about others’ preferences. We provide conditions ruling out this phenomenon, guaranteeing all equilibrium outcomes to be welfare-equivalent to truthful ones. (JEL C73, D45, D82, D83)

scholarly journals Combining Outcome-Based and Preference-Based Matching: A Constrained Priority Mechanism

2021 ◽  
pp. 1-24
Author(s):  
Avidit Acharya ◽  
Kirk Bansak ◽  
Jens Hainmueller
Keyword(s):  
Machine Learning ◽  
Host Country ◽  
Real World ◽  
Test Scores ◽  
Standardized Test ◽  
Market Design ◽  
Standardized Test Scores ◽  
Real World Data ◽  
Refugee Families ◽  
Strategy Proof

Abstract We introduce a constrained priority mechanism that combines outcome-based matching from machine learning with preference-based allocation schemes common in market design. Using real-world data, we illustrate how our mechanism could be applied to the assignment of refugee families to host country locations, and kindergarteners to schools. Our mechanism allows a planner to first specify a threshold $\bar g$ for the minimum acceptable average outcome score that should be achieved by the assignment. In the refugee matching context, this score corresponds to the probability of employment, whereas in the student assignment context, it corresponds to standardized test scores. The mechanism is a priority mechanism that considers both outcomes and preferences by assigning agents (refugee families and students) based on their preferences, but subject to meeting the planner’s specified threshold. The mechanism is both strategy-proof and constrained efficient in that it always generates a matching that is not Pareto dominated by any other matching that respects the planner’s threshold.

Selective crowdsourcing with various type task: models and analysis

2018 ◽  
Vol 13 (4) ◽  
pp. 815-839 ◽  
Author(s):  
Qinglong Gou ◽  
Fangdi Deng ◽  
Yanyan He
Keyword(s):  
Incomplete Information ◽  
Private Information ◽  
Marginal Cost ◽  
Design Methodology ◽  
Learning Effect ◽  
Task Type ◽  
Expected Payoff ◽  
Content Type ◽  
The Past ◽  
Winner Takes All

Purpose Selective crowdsourcing is an important type of crowdsourcing which has been popularly used in practice. However, because selective crowdsourcing uses a winner-takes-all mechanism, implying that the efforts of most participants except the final winner will be just in vain. The purpose of this paper is to explore why this costly mechanism can become a popularity during the past decade and which type of tasks can fit this mechanism well. Design/methodology/approach The authors propose a game model between a sponsor and N participants. The sponsor is to determine its reward and the participants are to optimize their effort-spending strategy. In this model, each participant's ability is the private information, and thus, all roles in the system face incomplete information. Findings The results of this paper demonstrate the following: whether the sponsor can obtain a positive expected payoff are determined by the type of tasks, while the complex tasks with a strong learning effect is more suitable to selective crowdsourcing, as for the other two types of task, the sponsor cannot obtain a positive payoff, or can just gain a rather low payoff; besides the task type, the sponsor's efficiency in using the solutions and the public's marginal cost also influence the result that whether the sponsor can obtain a positive surplus from the winner-takes-all mechanism. Originality/value The model presented in this paper is innovative by containing the following characteristics. First, each participant's ability is private information, and thus, all roles in the system face incomplete information. Second, the winner-takes-all mechanism is used, implying that the sponsor's reward will be entirely given to the participant with the highest quality solution. Third, the sponsor's utility from the solutions, as well as the public's cost to complete the task, are both assumed as functions just satisfying general properties.

scholarly journals Spillovers and R&D Incentive under Incomplete Information

2018 ◽  
Vol 6 (1-2) ◽  
pp. 50-65 ◽  
Author(s):  
Rittwik Chatterjee ◽  
Srobonti Chattopadhyay ◽  
Tarun Kabiraj
Keyword(s):  
Distribution Function ◽  
Incomplete Information ◽  
Private Information ◽  
Complete Information ◽  
Jel Classification ◽  
General Distribution ◽  
Two Stage ◽  
Stage Game ◽  
Alternative Scenarios

Spillovers of R&D outcome affect the R&D decision of a firm. The present paper discusses the R&D incentives of a firm when the extent of R&D spillover is private information to each firm. We construct a two-stage game involving two firms when the firms first decide simultaneously whether to invest in R&D or not, then they compete in quantity. Assuming general distribution function of firm types we compare R&D incentives of firms under alternative scenarios based on different informational structures. The paper shows that while R&D spillovers reduce R&D incentives under complete information unambiguously, however, it can be larger under incomplete information. JEL Classification: D43, D82, L13, O31

Large Electorates

2011 ◽  
Author(s):  
Michel Balinski ◽  
Rida Laraki
Keyword(s):  
Ordered Set ◽  
Common Language ◽  
Is Strategy ◽  
Strategy Proof

This chapter emphasizes the simplification of majority-ranking, stating that an increased number of judges in the jury or voters in an electorate or use of simplified common language help to simplify majority-values of competitors or candidates. Ordered set grades help obtain majority-value by beginning with the majority-grade or the lower middlemost grade and following alternating grades. Unambiguous order among the competitors can be determined with certainty given an increased number of judges or voters and relatively few grades. The competitor’s majority-gauge, which is strategy-proof-in-grading, is explained with the help of a theorem. Upper, lower, and difference tie-breaking rules that are strategy-proof-in-grading share properties with the majority-gauge-ranking.

Strategic Interaction and Interstate Crises: A Bayesian Quantal Response Estimator for Incomplete Information Games

2008 ◽  
Vol 16 (3) ◽  
pp. 250-273 ◽  
Author(s):  
Justin Esarey ◽  
Bumba Mukherjee ◽  
Will H. Moore
Keyword(s):  
Asymmetric Information ◽  
Incomplete Information ◽  
Learning Process ◽  
Private Information ◽  
Statistical Treatment ◽  
Quantal Response ◽  
Crisis Bargaining ◽  
Incomplete Information Games ◽  
Information Characteristics ◽  
Information Games

Private information characteristics like resolve and audience costs are powerful influences over strategic international behavior, especially crisis bargaining. As a consequence, states face asymmetric information when interacting with one another and will presumably try to learn about each others' private characteristics by observing each others' behavior. A satisfying statistical treatment would account for the existence of asymmetric information and model the learning process. This study develops a formal and statistical framework for incomplete information games that we term the Bayesian Quantal Response Equilibrium Model (BQRE model). Our BQRE model offers three advantages over existing work: it directly incorporates asymmetric information into the statistical model's structure, estimates the influence of private information characteristics on behavior, and mimics the temporal learning process that we believe takes place in international politics.

scholarly journals Beyond Truth-Telling: Preference Estimation with Centralized School Choice and College Admissions

2019 ◽  
Vol 109 (4) ◽  
pp. 1486-1529 ◽  
Author(s):  
Gabrielle Fack ◽  
Julien Grenet ◽  
Yinghua He
Keyword(s):  
School Choice ◽  
Test Scores ◽  
Real Life ◽  
Truth Telling ◽  
Student Preferences ◽  
Ex Post ◽  
Is Strategy ◽  
Deferred Acceptance ◽  
Strategy Proof ◽  
Novel Approaches

We propose novel approaches to estimating student preferences with data from matching mechanisms, especially the Gale-Shapley deferred acceptance. Even if the mechanism is strategy-proof, assuming that students truthfully rank schools in applications may be restrictive. We show that when students are ranked strictly by some ex ante known priority index (e.g., test scores), stability is a plausible and weaker assumption, implying that every student is matched with her favorite school/college among those she qualifies for ex post. The methods are illustrated in simulations and applied to school choice in Paris. We discuss when each approach is more appropriate in real-life settings. (JEL D11, D12, D82, I23)

scholarly journals STRATEGY-PROOF JUDGMENT AGGREGATION

2007 ◽  
Vol 23 (3) ◽  
pp. 269-300 ◽  
Author(s):  
FRANZ DIETRICH ◽  
CHRISTIAN LIST
Keyword(s):  
Deliberative Democracy ◽  
Judgment Aggregation ◽  
Impossibility Theorem ◽  
Is Strategy ◽  
Theoretic Concept ◽  
Game Theoretic ◽  
Strategy Proof ◽  
Strategy Proofness

Which rules for aggregating judgments on logically connected propositions are manipulable and which not? In this paper, we introduce a preference-free concept of non-manipulability and contrast it with a preference-theoretic concept of strategy-proofness. We characterize all non-manipulable and all strategy-proof judgment aggregation rules and prove an impossibility theorem similar to the Gibbard--Satterthwaite theorem. We also discuss weaker forms of non-manipulability and strategy-proofness. Comparing two frequently discussed aggregation rules, we show that “conclusion-based voting” is less vulnerable to manipulation than “premise-based voting”, which is strategy-proof only for “reason-oriented” individuals. Surprisingly, for “outcome-oriented” individuals, the two rules are strategically equivalent, generating identical judgments in equilibrium. Our results introduce game-theoretic considerations into judgment aggregation and have implications for debates on deliberative democracy.

scholarly journals Weighted Matching Markets with Budget Constraints

2019 ◽  
Vol 65 ◽  
pp. 393-421 ◽  
Author(s):  
Anisse Ismaili ◽  
Naoto Hamada ◽  
Yuzhe Zhang ◽  
Takamasa Suzuki ◽  
Makoto Yokoo
Keyword(s):  
Polynomial Time ◽  
Real World ◽  
Stable Matching ◽  
The Other ◽  
Matching Markets ◽  
Pairwise Stability ◽  
Negative Results ◽  
Strategy Proof ◽  
Pareto Efficient ◽  
Coalitional Stability

We investigate markets with a set of students on one side and a set of colleges on the other. A student and college can be linked by a weighted contract that defines the student's wage, while a college's budget for hiring students is limited. Stability is a crucial requirement for matching mechanisms to be applied in the real world. A standard stability requirement is coalitional stability, i.e., no pair of a college and group of students has any incentive to deviate. We find that a coalitionally stable matching is not guaranteed to exist, verifying the coalitional stability for a given matching is coNP-complete, and the problem of finding whether a coalitionally stable matching exists in a given market, is SigmaP2-complete: NPNP-complete. Other negative results also hold when blocking coalitions contain at most two students and one college. Given these computational hardness results, we pursue a weaker stability requirement called pairwise stability, where no pair of a college and single student has an incentive to deviate. Unfortunately, a pairwise stable matching is not guaranteed to exist either. Thus, we consider a restricted market called a typed weighted market, in which students are partitioned into types that induce their possible wages. We then design a strategy-proof and Pareto efficient mechanism that works in polynomial-time for computing a pairwise stable matching in typed weighted markets.

scholarly journals The Efficiency of Real-World Bargaining: Evidence from Wholesale Used-Auto Auctions

2020 ◽  
Author(s):  
Bradley J Larsen
Keyword(s):  
Incomplete Information ◽  
Real World ◽  
Bilateral Trade ◽  
Efficient Frontier ◽  
Gains From Trade ◽  
Efficiency Loss ◽  
Car Industry ◽  
Ex Post ◽  
Ex Ante ◽  
Used Car

Abstract This study empirically quantifies the efficiency of a real-world bargaining game with two-sided incomplete information. Myerson and Satterthwaite (1983) and Williams (1987) derived the theoretical ex-ante efficient frontier for bilateral trade under two-sided uncertainty and demonstrated that it falls short of ex-post efficiency, but little is known about how well bargaining performs in practice. Using about 265,000 sequences of a game of alternating-offer bargaining following an ascending auction in the wholesale used-car industry, this study estimates (or bounds) distributions of buyer and seller values and evaluates where realized bargaining outcomes lie relative to efficient outcomes. Results demonstrate that the ex-ante and ex-post efficient outcomes are close to one another, but that the real bargaining falls short of both, suggesting that the bargaining is indeed inefficient but that this inefficiency is not solely due to the information constraints highlighted in Myerson and Satterthwaite (1983). Quantitatively, findings indicate that over one-half of failed negotiations are cases where gains from trade exist, leading an efficiency loss of 12–23% of the available gains from trade.

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