Archives (2016-2017)

• Friday 29 October 12:00-13:00

Centre d'Economie de la Sorbonne, Salle S/2

Hervé Moulin (University of Glasgow)

Title: Fair Mixture of Public Outcomes (Joint work with H. Aziz and A. Bogomolnaia)

Abstract: We revisit probabilistic voting under dichotomous preferences, when a design constraint is to offer welfare guarantees to individual and group participants.

Minorities should not be crushed by the disagreeing majority, but the size of the support for a given outcome should nevertheless increase its weight. Given that we cannot combine Efficiency, Incentive Compatibility and Individual Fair Shares, we discuss second best mechanisms achieving two of these three design goals. We find that a simple Borda-like rule and the familiar Random Priority rule are IC and ensure good guarantees to homogenous groups. Borda is easier to compute but more inefficient than RP. The efficient Nash rule (maximizing the product of utilities) offers stronger group guarantees than both, but fails some simple IC tests . We also uncover a handful of challenging open questions.

• Friday 16 June 12:00-13:00

Centre d'Economie de la Sorbonne, Salle S/17

Philippe Bich (Université Paris 1)

Title: On the existence of a pairwise stable weighted network

Abstract: We prove the existence of a pair of Nash equilibrium and pairwise stable weighted network, where payoffs depend on players' strategies and on some endogenous network, the formation of the network itself depending on players' effort for creating links. The existence is given under conditions similar to Nash existence result: quasiconcavity of payoffs (with respect to each link), and continuity. Many applications and relationships with the current literature are given (Jackson-Wolinsky (Jet 1996), Bloch-Dutta (GEB 2009), Bala-Goyal (Econometrica 2000).

• Friday 9 June 12:00-13:00

Centre d'Economie de la Sorbonne, Salle S/17

Danilo Luizzi (University Ca'Foscari, Venise)

Title: Fast traders and slow price adjustments: an artificial market with strategic interaction and transaction costs.

Abstract: In this paper we propose an artificial market to model high frequency trading where (fast) agents strategically use thresholds rules to issue orders based on a signal on the level of stochastic liquidity prevailing on the market. A (slow) market maker is in charge to daily set the closing price and adjust transaction costs to control for the volatility of returns and market activity. We first show that a baseline version of the model with no frictions is able to generate returns endowed with several stylized facts, thus suggesting that the two time-scales used in the model are one (and possibly novel) way to obtain realistic market outcomes and that high-frequency trading can amplify liquidity shocks. We then explore whether transaction costs can be used to control excess volatility and improve market quality. While properly implemented taxation schemes may help in reducing the volatility, care is needed to avoid to excessively reduce activity in the market and intensify the occurence of abnormal peaks in returns.

• Friday 2 June 12:00-13:00

Centre d'Economie de la Sorbonne, Salle S/17

Vincent Iehlé (Université de Rouen Normandie )

Title: Timely matching (with G. Haeringer)

Abstract: A common practice for centralized clearinghouses is to compute, once and for all, the final allocation of students at a given date. Sometimes, however, a clearinghouse may proceed sequentially by computing allocations at different dates, leaving the option to participants to finalize their match before the final date. This may be helpful for students with scheduling constraints. We characterize the conditions under which such multi-period matching mechanisms produce stable matchings (with a stability concept adapted to this environment). These unconventional clearinghouses partially succeed in maintaining desirable properties of two-sided matchings. We use our results to evaluate the French college admission mechanism, where students can finalize their matches up to five weeks ahead the final date.

• Friday 25 May 12:00-13:00

Centre d'Economie de la Sorbonne, Salle S/17

Ani Guerdjikova (University of Cergy-Pontoise)

Title: Do Markets Prove Pessimists Right? (joint with Jürgen Eichberger)

Abstract: We study how ambiguity and ambiguity attitudes affect asset prices when consumers form their expectations based on past observations. In an OLG economy with risk-neutral yet ambiguity sensitive consumers, we describe limiting asset prices depending on the proportion of investor types. We then study the evolution of consumer type shares. With long memory, the market does not select for ambiguity-neutrality. Whenever perceived ambiguity is sufficiently small, but positive, only pessimists survive and determine prices in the limit. With one-period memory, equilibrium prices are determined by Bayesians. Yet, the average price of the risky asset is lower than its fundamental value.

• Friday 19 May 12:00-13:00

Centre d'Economie de la Sorbonne, Salle S/17

Jean-Jacques Herings ( Maastricht University)

Title: An Axiomatization of the Proportional Rule in Financial Networks (joint with Peter Csoka)

Abstract: The most important rule to determine payments in real-life bankruptcy problems is the proportional rule. Many bankruptcy problems are characterized by network aspects and default may occur as a result of contagion. Indeed, in financial networks with defaulting agents, the values of the agents’ assets are endogenous as they depend on the extent to which claims on other agents can be collected. These network aspects make an axiomatic analysis challenging. This paper is the first to provide an axiomatization of the proportional rule in financial networks. Our two central axioms are impartiality and non-manipulability by identical agents. The other axioms are claims boundedness, limited liability, priority of creditors, and continuity.

• Friday 12 May 12:00-13:00

Centre d'Economie de la Sorbonne, Salle S/17

Maria Gabriella Graziano (University of Naples Federico II )

Title: "On the notion of stable set when preferences are other-regarding"

Abstract. We present the notion of stable set for models of exchange economies with other-regarding preferences and address the existence problem. The importance of this solution concept is related to the fact that the existence of core allocations for exchange economies is not assured in a framework with more than two traders. Several results are distinguished based on two elements:

a) the notion of dominance between two allocations;

b) the notion of agents’ types.

• Friday 28 Avril 12:00-13:00

Centre d'Economie de la Sorbonne, Salle S/17

Jana Vyrastekova (Department of Economics Nijmegen University)

Titre: Professional norms as incentives: experiments with professionals and students (joint work with Jan-Dirk Kamman and Max Boodie)

Abstract: Do professional norms affect behavior and even override monetary incentives? We run incentivized experiments and provide evidence that this is the case. Purchasing professionals make decisions in an incentivized economic experiment and favor the passive recipients, Internal customers, more when the decision situation is framed to appeal to the professional norm of the Purchasing professionals than when making the same decision in the absence of the framing. Professionals sacrifice more money for the passive receiver when it is described as offering higher quality for the internal customer. As a robustness check, we find that the decision of student subjects is not affected by this framing. We also find that the length of the exposure to the profession explains the impact of the framing. The novices to the profession are not affected significantly, in contrast to the professionals with longer professional life. This is consistent with internalization of professional norms to be a long-term process.

• Friday 21 April 12:00-13:00

Centre d'Economie de la Sorbonne, Salle S/17

René Van Den Brink (Department of Econometrics, VU University)

Titre: Inflow Independence in Transboundary River Problems. (joint work with Arantza Estevez-Fernandez, Gerard van der Laan and Nigel Moes)

Abstract: We consider the problem of sharing water among agents located along a river, who have quasi-linear preferences over water and money, as introduced by Ambec and Sprumont (2002). Given an efficient distribution of river water, where water can be sent from upstream agents to downstream agents but not the other way around, the question is what should be the monetary transfers that downstream agents have to pay to upstream agents as compensation for the upstream agents to abstain from water consumption. Under quasi-linear utility functions, an efficient water allocation and a transfer scheme determine a welfare distribution. Under more general benefit functions, van den Brink, Estevez-Fernandez, van der Laan and Moes (2014) consider independence axioms with respect to benefit functions of upstream, respectively, downstream agents. Adding each of these independence axioms to three basic axioms yields a unique welfare distribution. In this paper we investigate the impact of similar independence axioms but with respect to water inflows. Surprisingly, together with the three basic axioms, these do not characterize a welfare distribution. Independence of upstream inflows turns out to be incompatible with the three basic axioms, while independence of downstream inflows yields multiple solutions. We weaken one of the basic axioms to get compatibility with upstream independence, and then strengthen it to get uniqueness with downstream independence.

Keywords: Water allocation, international water law, independence of inflows, incompatibility, multiplicity, uniqueness.

• Friday 7 Avril 12:00-13:00

Centre d'Economie de la Sorbonne, Salle S/17

Tim Hellmann (University of Bielefeld)

Titre: The dynamics of continuous cultural traits in social networks

Abstract: We consider an overlapping generations model where continuous cultural traits are transmitted from an adult generation to the children. A weighted social network describes how children are influenced not only by their parents but also by other role models within the society. Parents can invest into the purposeful socialization of their children by strategically displaying a cultural trait (which need not coincide with their true cultural trait) or influencing the social network. We observe a cultural substitution effect when parents choose their behavior optimally. Based on Nash equilibrium behavior, we then study the dynamics of cultural traits throughout generations. These converge in case of fixed networks if parent's influence on their children is large enough compared to the social environment's influence. Under convergent dynamics, closed subgroups fully assimilate, while heterogeneous traits prevail in the other groups. Speed of convergence is low when parents' incentives to socialize their children to the own trait are high.

• Friday 31 Mars 12:00-13:00

Centre d'Economie de la Sorbonne, Salle S/17

Térence Bayen (Université de Montpellier)

Titre: Minimisation du temps de crise et applications

Abstract: Dans cet exposé, on s'intéresse à la minimisation de la fonctionnelle dite ``temps de crise'' et qui représente le temps passé par une solution d'un système dynamique contrôlé à l'extérieur d'un ensemble donné. Cet ensemble représente des contraintes d'état ; pour des systèmes biologiques par exemple, il peut s'agir de contraintes écologiques. Minimiser le temps de crise offre une alternative intéressante à la prise en compte directe des contraintes d'état dans le système. La fonction temps de crise possède la particularité d'être discontinue et on s'intéresse d'abord aux conditions d'optimalité du premier ordre (type Pontryagin) afin de synthétiser des lois de commande optimales. Pour ce faire, nous utiliserons le principe du maximum hybride. On étudiera également une régularisation de ce problème ainsi que la convergence des solutions du problème régularisé vers une solution du problème original (par Gamma-convergence). Enfin, nous présenterons plusieurs exemples de calcul de stratégies optimales pour le temps de crise et notamment dans le cas du système Lotka-Volterra avec contrôle. Il s'avère alors que la minimisation du temps de crise offre une alternative originale à la stratégie de temps minimal pour rejoindre le noyau de viabilité. .

• Friday 24 Mars 12:00-13:00

Centre d’Economie de la Sorbonne, Salle S/17

Jean-Philippe Lefort (Paris-Dauphine)

Title: Ambiguity Aversion and Machina’s Paradoxes (with Adam Dominiak)

Abstract: Baillon, L’Haridon, and Placido (AER, 2010) emphasize that Machina’s (AER, 2009) paradoxes do not only falsify the Choquet expected utility theory, “but also four other popular models for ambiguity of the literature, namely maxmin expected utility, variational preferences, alpha-maxmin and the smooth model of ambiguity aversion”. This paper exemplifies that the falsification argument is invalid. Machina’s choice behavior does not violate any of the axioms of the four ambiguity models, but merely a particularly strong notion of unambiguous events. Under a weaker notion of unambiguous events, Machina’s puzzle can be explained by the four ambiguity models mentioned.

• Friday 17 Mars 12:00-13:00

Centre d’Economie de la Sorbonne, Salle S/17

Joseph Abdou (Université Paris 1)

Title: A qualitative theory of conflict resolution and political compromise

• Friday 10 Mars 12:00-13:00

Centre d’Economie de la Sorbonne, Salle S/17

Sudipta Sarangi (Virginia Tech)

Title: Electoral College: A Multibattle Contest with Complementarities (with Cary Deck and Matt Wiser)

Abstract: The Electoral College system used to elect the President of the United States is an example of a multibattle contest with complementarities. Due of heterogeneity in the value of the different state level sub-contests, many different combinations of state victories can lead to an overall victory which impacts contestant strategy. This paper develops a theoretical of such a multibattle contest with complementarities, and tests its predictions in the lab for a simplified four state Electoral College map. To focus on purely on the strategic aspects of the Electoral College game, in the lab we use three different Electoral College maps while always keeping the total number of delegates the same. Our experimental results show that subjects behave quite differently from the theoretical predictions. Instead they seem to be using a mental accounting rule according to which they choose to spend half the value of the prize as their budget in the lottery success function. Then, depending on the map, they follow different bidding patterns the most predominant pattern being one that implicitly takes into account the marginal importance of each state for winning the election.

• Friday 3 Mars 12:00-13:00

Centre d’Economie de la Sorbonne, Salle S/17

Paolo Barucca (University of Zurich)

Title: Network Valuation in Financial Systems

Abstract: I will introduce a network valuation model (hereafter NEVA) for the ex-ante valuation of claims among financial institutions connected in a network of liabilities. Similar to previous works that I will briefly review during the presentation, the new framework allows to endogenously determine the recovery rate on all claims upon the default of some institutions. In addition, it also allows to account for ex-ante uncertainty on the asset values, in particular the one arising when the valuation is carried out at some time before the maturity of the claims. The framework encompasses as special cases both the ex-post approaches of Eisenberg and Noe and its previous extensions, as well as the ex-ante approaches, in the sense that each of these models can be recovered exactly for special values of the parameters. We characterize the existence and uniqueness of the solutions of the valuation problem under general conditions on how the value of each claim depends on the equity of the counterparty. I will also discuss limitations and extensions of the framework to derivatives market and its relation with liquidity contagion mechanisms.

• Friday 24 February 12:00-13:00

Centre d’Economie de la Sorbonne, Salle S/17

Kostas Bimpikis (Stanford)

Title: Designing Dynamic Contests

Abstract: Participants race towards completing an innovation project and learn about its feasibility from their own efforts and their competitors' gradual progress. Information about the status of competition can alleviate some of the uncertainty inherent in the contest, but it can also adversely affect effort provision from the laggards. This paper explores the problem of designing the award structure of a contest and its information disclosure policy in a dynamic framework and provides a number of guidelines for maximizing the designer's expected payoff. In particular, we show that intermediate awards may be used by the designer to appropriately disseminate information about the status of competition. Interestingly, our proposed design matches several features observed in real-world innovation contests.

• Friday 17 February 12:00-13:00

Holidays.

• Friday 10 February 12:00-13:00

Holidays.

• Friday 03 February 12:00-13:00

Centre d’Economie de la Sorbonne, Salle S/17

Cheng Wan (Shanghai University of Finance and Economics)

Title: Strategic decentralization and the provision of global public goods (avec Renaud Foucart).

Abstract: We study strategic decentralization in the provision of a global public good. A federation, with the aim of maximizing the aggregate utility of its members, may find it advantageous to decentralize the decision-making, so that its members act autonomously to maximize their own utility. If the political structures are chosen simultaneously, federations that are larger or more sensitive to the public good have more incentives to remain centralized. This is not always true if the political structures are chosen sequentially. A federation that always remains centralized in the simultaneous game may choose to commit to decentralization if it moves first.

• Friday 27 January 12:00-13:00

Centre d’Economie de la Sorbonne, Salle S/17

Stefano Moretti (Ceremade Université Paris-Dauphine)

Title: On cooperative connection situations where the players are located at the edges.

Abstract: In classical cooperative connection situations, the players are located at some nodes of a network and the cost of a coalition is based on the problem of .nding a network of minimum cost connecting all the players in the coalition to a source. In this paper we study a di.erent connection situation with no source and where the players are the edges, and yet the optimal network associated to each coalition (of edges) is not .xed and follows a cost-optimization procedure. The proposed model shares some similarities with classical minimum cost spanning tree games, but also substantial di.erences, speci.cally on the appropriate way to share the costs among the players located at the edges. We show that the core of these particular cooperative games is always non-empty and some core allocations can be easily computed.

• Friday 20 January 12:00-13:00

Centre d’Economie de la Sorbonne, Salle S/17

No Seminar

• Friday 13 January 12:00-13:00

Centre d’Economie de la Sorbonne, Salle 115

Dylan Possamai (Université Paris-Dauphine)

Title: “Volatility demand management for electricity: a moral hazard approach”

Abstract: In this work, we propose a model of electricity demand management through a principal-agent problem, allowing to obtain almost explicit optimal compensations for the consumer. We then illustrate our findings through several numerical experiments, putting the emphasis on the practical implementation of the contracts. This is a joint work with René Aïd and Nizar Touzi.

• Friday 18 Novembre 12:00-13:00

Centre d’Economie de la Sorbonne, Salle S/17

Anil Alpman (Université Paris 1)

A Time Allocation System and the Shadow Price of Restricting Market Work hours

• Friday 28 October 12:00-13:00

Centre d’Economie de la Sorbonne, Salle S/17

Abhishek Rankan (Technical University of Denmark)

Emergence of an urban traffic macroscopic fundamental diagram.

• Friday 7 October 12:00-13:00

Centre d’Economie de la Sorbonne, Salle S/17

Fuad Aleskerov (National Research University Higher School of Economics and Institute of Control Sciences of Russian Academy of Sciences)

Conflict zones and conflict resolution in Arctic region

• Friday 30 September 12:00-13:00

Centre d’Economie de la Sorbonne, Salle S/17

Marc Fleurbaey, Woodrow Wilson School, Princeton University

« Rationality under risk and uncertainty »

• Friday 23 September 12:00-13:00

Centre d’Economie de la Sorbonne, Salle S/17

Jesper Normann Breinbjerg, University of Southern Denmark

"Strategic Arrival Times to Queueing Systems”

• Friday 9 September 12:00-13:00

Centre d’Economie de la Sorbonne, Salle S/17

Lars Peters Osterdal, Copenhagen Business School

“The curse of the first-in-first-out discipline”, written with Trine Tornøe Platz (University of Southern Denmark)