Generalized Reduced-Form Auctions: A Network-Flow Approach

Che, Yeon‐Koo; Kim, Jin-Woo; Mierendorff, Konrad

doi:10.2139/ssrn.1957071

Cited by 22 publications

(60 citation statements)

References 29 publications

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“…Border (1991) characterizes which interim allocation probabilities are implementable by some ex post allocation rule in the case of single-unit auctions. Che, Kim, and Mierendorff (2013) provide a substantial generalization of this result to multi-unit auctions, and also extend the reduced-form approach from auctions to the bilateral trade setting. Thus, instead of maximizing over the ex post trade rule, we maximize directly over the interim trade probabilities and can explicitly derive the optimal trade rule.…”

mentioning

confidence: 82%

“…In the case of single-unit auctions, Border (1991) characterized which interim allocation probabilities are implementable by some ex post allocation rule. Che et al (2013) generalize this to the case of multi-unit auctions when agents may face capacity constraints. In particular, the results in Che et al (2013) extend to the bilateral trade setting, allowing us to revert to this reduced-form approach.…”

Section: The Revenue Maximization Problemmentioning

confidence: 95%

“…Che et al (2013) generalize this to the case of multi-unit auctions when agents may face capacity constraints. In particular, the results in Che et al (2013) extend to the bilateral trade setting, allowing us to revert to this reduced-form approach. The conditions derived in Che et al (2013) allow us to maximize directly over the interim trade probabilities y B and y S instead of the ex post trade rule y f .…”

Section: The Revenue Maximization Problemmentioning

confidence: 95%

“…Indeed, because the agent's expected utility depends on the mechanism through the reference point, pointwise maximization of the objective function is not possible. In order to nevertheless explicitly derive the optimal trade rule, we make use of the reduced-form approach developed first by Border (1991) and recently generalized by Che et al (2013). In the case of single-unit auctions, Border (1991) characterized which interim allocation probabilities are implementable by some ex post allocation rule.…”

Section: The Revenue Maximization Problemmentioning

confidence: 99%

“…In particular, the results in Che et al (2013) extend to the bilateral trade setting, allowing us to revert to this reduced-form approach. The conditions derived in Che et al (2013) allow us to maximize directly over the interim trade probabilities y B and y S instead of the ex post trade rule y f . Using the conditions that ensure that these trade probabilities can actually be implemented by some ex post trade rule, we can eliminate the seller's trade probability from the problem and maximize over y B only.…”

Section: The Revenue Maximization Problemmentioning

confidence: 99%

See 4 more Smart Citations

Bilateral Trade with Loss-Averse Agents

Benkert

2015

SSRN Journal

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We study the bilateral trade problem put forward by Myerson and Satterthwaite (1983) under the assumption that agents are loss-averse, using the model developed by Kőszegi and Rabin (2006, 2007). We show that the endowment effect increases the sellers information rent, and that the attachment effect reduces the buyer's information rent. Further, depending on the distribution of types, loss-aversion can reduce the severity of the impossibility problem. However, the result cannot be reversed. Turning to the design of optimal mechanisms, we show that in both revenue and welfare maximizing mechanisms the designer optimally provides the agents with full insurance in the money dimension and with partial insurance in the trade dimension. In fact, when the stakes are large, loss-aversion can eliminate trade altogether. We show that all results display robustness to the exact specification of the reference point and provide some results on general mechanism design problems.

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mentioning

confidence: 82%

Section: The Revenue Maximization Problemmentioning

confidence: 95%

Section: The Revenue Maximization Problemmentioning

confidence: 95%

Section: The Revenue Maximization Problemmentioning

confidence: 99%

Section: The Revenue Maximization Problemmentioning

confidence: 99%

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Bilateral Trade with Loss-Averse Agents

Benkert

2015

SSRN Journal

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The nature, detection, and avoidance of harmful discrimination in criminal justice

O'Flaherty,

Sethi,

Williams

2023

J Policy Anal Manage

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We provide a selective survey of the literature on discrimination by criminal justice agents, and argue for a taxonomy of harms that differs from conventional approaches. Discrimination can be self‐defeating if it reduces welfare among targets of discrimination while serving no legitimate purpose for the discriminating party. Even if a legitimate purpose is served, discrimination can be deliberative or demeaning, resulting in welfare losses that need to be accounted for. Deliberative and demeaning discrimination can also be self‐defeating through general equilibrium effects on witness cooperation, clearance rates, and preemptive and retaliatory violence. We consider how harmful discrimination can be detected and avoided, as well as changes in our understanding of discrimination resulting from the proliferation of predictive algorithms.

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Two ways to auction off an uncertain good

Watts

2016

J. Econ.

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An auction framework is examined where each seller is uncertain about whether or not he will have a good available to sell. A timely example includes the auctioning off of radio spectrum by licensed primary users to unlicensed secondary users. A licensed primary user may not use the spectrum all of the time, but may not know in advance whether or not he will need the spectrum himself and thus whether or not he will have spectrum bandwidth available to rent out. We consider two types of auctions: an ex-post auction which takes place after each seller learns about the availability of the good and an ex-ante auction which takes place before each seller learns about availability. The expected payoffs to buyers, sellers, and to society are then compared. The ex-ante auction can cause buyers to bid on multiple expected units to ensure that they end up with at least one actual unit. Such over purchasing can create a loss to society. Sellers will prefer the ex-post auction since if fewer units are actually available to sell, then they can be sold at a higher price. Whereas in the ex-ante auction all sellers have one expected unit available to sell which results in a lower price. However, if high value buyers are common, then a buyer may prefer the ex-ante auction as it can be easier to win an expected unit than an ex-post actual unit. In contrast, if a buyer has a high valuation and if high value buyers are uncommon, then he may prefer the ex-post auction since he has a strong chance to win an actual unit.

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Generalized Reduced-Form Auctions: A Network-Flow Approach

Cited by 22 publications

References 29 publications

Bilateral Trade with Loss-Averse Agents

Bilateral Trade with Loss-Averse Agents

The nature, detection, and avoidance of harmful discrimination in criminal justice

Two ways to auction off an uncertain good

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