CES Economic Theory Seminar

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Friday, June 10th, 2022 : Caroline Ventura (Centre d'Economie de la Sorbonne)

Location and time: Maison des Sciences Economiques, Room S17, 12-13h

Title : Social tension preorder: a new approach to inequality reduction

Summary: We propose a new approach to inequality and welfare measurement which captures the social tension arising from the deprivation felt by the poorer individuals and the satisfaction felt by the richer. More precisely, we introduce a new preorder on income distributions, called the ”social tension” preorder denoted simply ST in the sequel, based on the notions of absolute satisfaction and absolute deprivation, as introduced by Chateauneuf and Moyes [8]). ST postulates that antagonist groups of individuals may behave differently in terms of welfare comparison: each ”poor” individual compares herself with richer individuals, while each ”rich” individual compares herself with poorer ones. We show that progressive tax by bracket reduces social tension in the ST sense. We then provide an explicit algorithm allowing to pass from a dominated distribution to a dominating one by a sequence of elementary transfers respecting ST. Furthermore, we derive from the notions of deprivation and satisfaction an index of social tension which allows to compare two income distributions even when none of the two is preferred to the other for ST. Finally, we characterize the dual expected utility functions which respect ST.

Friday, May 20th, 2022 : Antonio Nicolo (University of Padua)

Location and time: Maison des Sciences Economiques, Room S17, 12-13h

Title : Dynamic Stability in One-Sided Matching

Summary: TBE

Friday, May 13th, 2022 : Ulysse Lojkine (Université Paris X/Ecole d'Economie de Paris)

Location and time: Maison des Sciences Economiques, Room S17, 12-13h

Title : A general power index

Summary: I propose a general power index in games. The power of an agent over an outcome is understood as the equilibrium effect on the outcome of variations in the agent’s preferences. I show that the new index, ∆, has the following properties: (i) classic measures of freedom of choice are a special case of the ∆ index in the context of individual choice; (ii) the Banzhaf and Shapley-Shubik indexes are special cases of the ∆ index in the context of binary voting games; (iii) in bargaining games, the ∆ index of a player combines his outside option and other parameters; (iv) the ∆ index allows a generalization of the Barry decomposition of success between power and luck to all unidimensional spatial games; (v) the ∆ power of a firm on its price is related to its Lerner index, but also to its technology and to the potential entry of competitors; (vi) in a simple competitive exchange setting, each agent has zero ∆ power on the equilibrium price but a ∆ power density can be defined, which, under some assumptions on preferences, is proportional to the agents’ wealth.

Friday, April 8th, 2022 : Jens L. Hougaard (University of Copenhagen)

Location and time: Maison des Sciences Economiques, Room S17, 12-13h

Title : Blockchain based decentralized reward sharing: the case of mining pools

Summary: We introduce a “reciprocity protocol”, an innovative approach to coordinating and sharing rewards in blockchains. Inherently decentralized and easy to implement, it puts emphasis on incentives rather than forcing specific sharing rules from the outset. Analyzing the non-cooperative game the protocol induces, we identify a robust, strict, and Pareto-dominant symmetric equilibrium. In it, even self-centered participants show extensive reciprocity to one another. Thus, despite a setting that is generally unfavorable to reciprocal behavior, the protocol manages to build trust between the users by taking on a role akin to a social contract.

Friday, April 1st, 2022 : Andy Mackenzie (University of Glassgow)

Location and time: Maison des Sciences Economiques, Room S17, 12-13h

Title : Menu mechanisms

Summary: We investigate menu mechanisms: dynamic mechanisms where at each history, an agent selects from a menu of his possible assignments. We consider both ex-post implementation and full implementation for a strengthening of dominance that covers off-path histories, and provide conditions under which menu mechanisms provide these implementations of rules. Our results cover a variety of environments, including matching with contracts, labor markets, auctions, school choice, marriage, object allocation, and elections.

Friday, March 18th, 2022 : Franz Dietrich (Centre d'Economie de la Sorbonne)

Location and time: Maison des Sciences Economiques, Room 115, 12-13h

Title : Deliberation and the Wisdom of Crowds

Summary: Does group deliberation increase group competence, measured by the correctness probability of majority decisions? We present a model of opinion formation based on sources, and a non-game-theoretic model of deliberation as sharing and absorbing. Two jury theorems, one pre-deliberation and one post-deliberation, suggest that deliberation tends to improve group decisions. Three major voting failures are: (1) overcounting widespread evidence ñevidence with wider spread gets more impact; (2) neglecting evidential inequality voters get equal weight despite having unequally strong evidence; (3) neglecting evidential complementarity information that follows by combining evidences dispersed across voters remains undercounted because few or no voters access the full combination. Simulations and theoretic arguments suggest that deliberation normally reduces all three failures. But there exist systematic exceptions where deliberation increases Failure 1, sometimes even to the extent that group competence overall falls. Our analysis recommends even and participatory deliberation: no evidences or persons are privileged, and everyone contributes.

Friday, February 11th, 2022 : Sylvain Bouveret (Ensimage, Université de Grenoble)

Location: and time: Maison des Sciences Economiques, Room S17, 12-13h

Title : Picking Sequences for Resource Allocation

Summary: Fairly and efficiently dividing a set of indivisible objects between a set of agents is a complex problem with a lot of practical applications. These applications range from allocating courses to students to scheduling observation requests on a constellation of Earth observing satellites. In this talk, after a short general introduction on fair division, we will present a very simple yet remarkable allocation protocol: picking sequences. Being conceptually quite simple, this protocol can be easily understood and implemented in various practical contexts. Yet, in spite of its simplicity, this protocol has nevertheless very appealing theoretical properties. During the presentation, we will particularly focus on the problem of finding the fairest picking sequences for a given configuration. We will also touch upon the topic of manipulating picking sequences.

Friday, December 10th, 2021 : Mattias Fuentes (National University of San Martin)

Location and time: Maison des Sciences Economiques, Room 115, 12-13h

Title : Continuity of equilibria in Pettis and Gelfand economies

Summary: This paper states conditions under which the equilibrium correspondence is continuous by considering economies with Banach commodity spaces. The generality of the commodity space allows to investigate the full continuity of the Walras correspondence in Pettis and Gelfand economies, i.e., those economies whose feasibility comes from a Pettis and a Gelfand integral respectively. Consequently, continuity of equilibria in problems of allocations over unbounded time horizon, commodity differentiation, uncertainty and financial markets are remarkable applications of the Main Theorem.

The paper extends the results of Cea and Fuentes (2020) where the commodity space is a separable Banach space with nonempty interior and feasibility makes use of the (stronger) Bochner integral. In both cases it is shown that it is not necessary to impose any differentiability assumption as those required in regular economies.

Friday, December 3rd, 2021 : Elena del Mercato (Centre d'Economie de la Sorbonne)

Location and time : Maison des Sciences Economiques, Room 115, 12-13h

Title : Sufficient conditions for a "simple" Second Welfare Theorem with other-regarding preferences

Summary: We consider a pure exchange economy with consumption externalities in preferences. Using the notion of competitive equilibrium à la Nash, we point out that a simple condition for restoring the Second Welfare Theorem is that the set of Pareto optimal allocations is included in that of internal Pareto optimal allocations. We provide the Social Redistribution assumption to ensure such inclusion. This assumption is weaker than other relevant assumptions that have been studied in the literature. We then introduce the differential counterpart of Social Redistribution, called Directional Social Redistribution. This assumption entails an interesting consequence that relates social marginal utilities and supporting prices at a Pareto optimal allocation. Finally, we show that, for Bergson-Samuelson utility functions, Directional Social Redistribution is ensured by a specific property of the Jacobian matrix, which has a natural interpretation in terms of externalities.

Friday, November 26th, 2021 : Rajnish Kumar (Queens University Belfast)

Location and time : Maison des Sciences Economiques, Room S17, 12-13h

Title : Expected Values for Variable Network Games

Summary: A network game assigns a level of collectively generated wealth to every network that can form on a given set of players. A variable network game combines a network game with a network formation probability distribution, describing certain restrictions on network formation. Ex- pected levels of collectively generated wealth and expected individual payoffs can be formulated in this setting.

We investigate properties of the resulting expected wealth levels as well as the expected variants of well-established network game values as allocation rules that assign to every variable network game a payoff to the players in a variable network game. We establish two axiom- atizations of the Expected Myerson Value, originally formulated and proven on the class of communication situations, based on the well-established component balance, equal bargaining power and balanced contributions properties. Furthermore, we extend an established axiomati- zation of the Position Value based on the balanced link contribution property to the Expected Position Value.

Friday, November 19th, 2021 : Tarun Sabarwal (University of Kansas)

Location and time : Maison des Sciences Economiques, Room 115, 12-13h

Title : The control and spread of contagion in networks

Summary: We study proliferation of an action in a network coordination game that is generalized to include a tractable, model-based measure of virality to make it more realistic. We present new algorithms to compute contagion thresholds and equilibrium depth of contagion and prove their theoretical properties. These algorithms apply to arbitrary connected networks and starting sets, both with and without virality. Our algorithms are easy to implement and help to quantify relationships previously inaccessible due to computational intractability. Using these algorithms, we study the spread of contagion in scale-free networks with 1,000 players using millions of Monte Carlo simulations. Our results highlight channels through which contagion may spread in networks. Small starting sets lead to greater depth of contagion in less connected networks. Virality amplifies the effect of a larger starting set and may make full network contagion inevitable in cases where it would not occur otherwise. It also brings contagion dynamics closer to a type of singularity. Our model and analysis can be used to understand potential consequences of policies designed to control or spread contagion in networks.

Friday, November 12th, 2021 : Jean-Jacques Herings (Maastricht University)

Location and time : Maison des Sciences Economiques, Room 115, 12-13h

Title : Competitive Equilibria in Matching Models with Financial Constraints

Summary: We consider the one-to-one two-sided matching with contracts model in which buyers face financial constraints. In this model there is a stable outcome, but not necessarily a competitive equilibrium as defined in the standard way. We propose a new equilibrium notion, quantity-constrained competitive equilibrium (QCCE) that allows buyers to form rational expectations on the lack of supply when their financial constraints are binding. We show the existence of QCCEs and establish the equivalence among QCCE outcomes, stable outcomes, and core outcomes. We also analyze the existence of QCCEs with uniform prices, the lattice property of QCCEs, and the rural hospital theorem of QCCEs. We finally examine the relation between models with financial constraints and models with price controls.

Friday, November 5th, 2021 : Van Hong Nguyen (University of Kansas)

Location and time : Maison des Sciences Economiques, Room 115, 12-13h

Title : Constructing Divisia Monetary Aggregates for Singapoire

Summary: Since Barnett derived the user cost price of money, the economic theory of monetary services aggregation has been developed and extended into a field of its own with solid foundations in microeconomic theory. Divisia monetary aggregates have repeatedly been shown to be strictly preferable to their simple sum counterparts, which have no competent foundations in microeconomic aggregation or index number theory. However, most central banks in the world, including that of Singapore, the Monetary Authority of Singapore (MAS), still report their monetary aggregates as simple summations. Recent macroeconomic research about Singapore tends to focus on exchange rates as a monetary policy target but ignores the aggregate quantity of money. Is that because quantities of money are irrelevant to economic activity? To examine the role of monetary quantities as potential monetary instruments, indicators, or targets and their relevance to predicting real economic activity in Singapore, this paper applies the user cost of money formula and the recently developed credit-card-augmented Divisia monetary aggregates formula to construct monetary services indexes for Singapore. We produce those state-of-the-art monetary services indexes from Jan 1991 to Mar 2021. We see that Divisia measures behave differently from simple sum measures in the period before the year 2000, while interest rates were high. Credit-card-augmented Divisia monetary services move closely with the conventional Divisia monetary aggregates, since the volume of credit card transactions in Singapore is relatively small compared with other monetary service assets. In future work, we plan to use our data to explore central bank policy in Singapore and to propose improvements in that policy. By making our data available to the public, we encourage others to do the same.

Friday, October 22nd, 2021 : François Maniquet (Université Catholique de Louvain)

Location and time : Maison des Sciences Economiques, Room 115, 12-13h

Title : Well-being measurement with reference consumption

Summary: We investigate how to define well-being measures when individuals have heterogeneous preferences and consumption bundles should be evaluated by comparison with some reference consumption (such as the average consumption in a reference group, a poverty line bundle, etc.). A relative well-being measure has three arguments: the current consumption bundle of an individual, her self-centered preferences and the reference consumption, which we call aspiration. Most of the axioms we impose on these measures build on the lattice structure of the set of indifference surfaces generated by convex preferences, as in Fleurbaey \& Maniquet (2017). We characterize five families of relative well-being measures. For three of them, well-being is equal to the ratio between the money value of the consumption and the money value of the aspiration, with prices being endogenous to the preferences.

Friday, October 15th, 2021 : Andy Zapechelnyuk (St Andrews University)

Location and time : Maison des Sciences Economiques, Room 115, 12-13h

Title : Bargaining and trade under incomplete information with the help of delay

Summary: We study bargaining under incomplete information with transferable utility and balanced budget, with applications to trade and provision of public goods. In our setting, agents agree not only how but also when to trade. We are interested in bargaining rules that do not depend on priors. We find a unique rule that satisfies a set of axioms. Under this rule, the surplus is shared as in the Nash bargaining solution, and the higher the surplus, the sooner it is shared. We present a dynamic protocol that implements this rule independently of priors.

Friday, October 8th, 2021 : Remzi Sanver (LAMSADE, Université Paris Dauphine)

Location and time : Maison des Sciences Economiques, Room 115, 12-13h

Title : Monotonicity Violations under Plurality with a Runoff: The case of French Presidential Elections

Summary: A voting rule is monotonic if a winning candidate never becomes a loser by being raised in voters’ rankings of candidates, ceteris paribus. Plurality with a runoff is known to fail monotonicity. To see how widespread this failure is, we focus on French presidential elections since 1965. We identify mathematical conditions that allow a logically conceivable scenario of vote shifts between candidates that may lead to a monotonicity violation. We show that eight among the ten elections held since 1965 (those in 1965 and 1974 being the exceptions) exhibit this theoretical vulnerability. To be sure, the conceived scenario of vote shifts that enables a monotonicity violation may not be plausible under the political context of the considered election. Thus, we analyze the political landscape of these eight elections and argue that for two of them (2002 and 2007 elections), the monotonicity violation scenario was plausible within the conjuncture of the time.

Friday, October 1st, 2021 : Anna Bogomolnaia (Centre d'Economie de la Sorbonne)

Location and time : Maison des Sciences Economiques, Room 115, 12-13h

Title : Team formation

Summary: We consider a classical fair division setting where n agents have to divide a finite set A of indivisible goods. Agents have nonnegative cardinal valuations of individual goods and additive utilities over subsets of A. The existing literature (mostly coming from Computer Science) is looks at possibility of division algorithms which would combine efficiency (PO) and approximate fairness. Main approximate fairness axioms studied are variants of the following requirements:

(1) "Envy-Free up to one good" (EF1), where an agent does not envy allocation of another agent provided one good is dropped from that allocation

(2) "Proportionality up to one good" (Pro1), where an agent can obtain at least 1/n-th of her utility of the whole set A by adding to her allocation one good

We consider a subclass of this model, when all agents are to receive the same number of goods. There are nk goods, and each agent should get exactly k of them. In this sub-model, approximate comparisons based on adding or deleting a good have much less meaning. We thus propose alternative notions of above concepts.

(1)' EF1: an agent does not envy allocation of another agent after she exchanges one good with that agent

(2)' Pro1: an agent can obtain at least 1/n-th of her utility of the whole set A by exchanging one good with someone else.

In the general model EF1 implies Pro1, but here those properties are logically independent for n>2. In the general model, Nash allocation (one which maximizes the product of utilities) is known to be PO and EF1 (and Pro1). In our setting, an allocation obtained by Round Robin is both Pro1 and EF1, but it is usually not PO. For 2 agents, Leximin allocation is Pro1 and EF1 (but Nash is not). If n>2,both Nash and Leximin allocation can fail Pro1 and EF1. It is not known whether Pro1 and EF1, or PO and Pro1 are compatible or n>2. There are two sub-domains where PO, EF1, and Pro1 are compatible: dichotomous domain, and domain of identical preferences. In particular, both Nash and Leximin allocations satisfy all three properties. We also discuss different notion of (approximate) fairness and their inter-relations and achievability in our model.

Friday, September 24th, 2021 : Norovsambuu Tumennasan (Dalhousie University)

Location and time : Maison des Sciences Economiques, Room 115, 12-13h

Title : Robust Group-Strategy Proofness

Summary: Strategy-proofness (SP) is a sought-after property in social choice functions because it ensures that agents have no incentive to misrepresent their private infor- mation at both the interim and ex-post stages. Group strategy-proofness (GSP), however, is a notion that is applied to the ex-post stage but not to the interim stage. Thus, we propose a new notion of GSP, coined robust group strategy-proofness (RGSP), which ensures that no group benefits by deviating from truthtelling at the interim stage. We show for the provision of a public good that the Minimum De- mand rule (Serizawa, 1999) satisfies RGSP when the production possibilities set satisfies a particular topological property. In the problem of allocating indivisible objects, an acyclicity condition on the priorities is both necessary and sufficient for the Deferred Acceptance rule to satisfy RGSP, but is only necessary for the Top Trading Cycles rule. For the allocation of divisible private goods among agents with single-peaked preferences (Sprumont, 1991), only free disposal, group replacement monotonic rules within the class of sequential allotment rules satisfy RGSP.

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