Archives 2023-2024
Archives 2023-2024
Friday, September 22nd Hervé Moulin (University of Glasgow)
Location and time: Maison des Sciences Économiques, S17 , 12-13h
Title : Minimising externalities ex ante and mechanism design
Summary: We revisit in the fair division context the fundamental normative trade-off between the liberal (Coasian) resolution of interpersonal externalities by decentralised person to person negotiations, apt to discover new unforeseen solutions and promote cooperation; and the regulated approach under the rule of a centrally designed mechanism, completely eliminating unscripted interactions.
At the ex ante stage where the other agents' characteristics are unknown, the difference in welfare between my worst and best cases scenarios is the extent of interpersonal externalities I can be subject to. As a solution of the normative trade-off above we submit that the role of the mechanism designer should be limited to the minimisation of this gap.
Maximising the worst case welfare, discussed first in mathematical cake-cutting stories more than 75 years ago is probably the simplest and most versatile normative principle in fair division. Minimising the best case welfare is an equally legitimate concern. It is not spiteful when the eventual outcome is efficient: allowing you higher potential gains ex ante must reduce those of some other agent(s).
In most fair division problems, the designer can choose from a menu of maximal lower guarantees (my worst case welfare as a function of my characteristics) and/or minimal upper guarantees. Discovering these menus is a hard mathematical question, even in many simple instances. We do it in two iconic examples: the commons problem with homogenous inputs and outputs, and the allocation of indivisible goods (or bads) with transfers. Thre results confirm the prominence of some familiar division rules and discover new ones.
Friday, October 20th Franz Dietrich (Centre d'Economie de la Sorbonne)
Location and time: Maison des Sciences Économiques, S17 , 12-13h
Title : Welfare vs. choice-theoretic utility
Friday, October 27th No seminar on this date due to other scientific events
Friday, November 3rd Elena Parilina (Saint Petersburg State University )
Location and time: Maison des Sciences Économiques, S17 , 12-13h
Title : TBA
Summary: TBA
Friday, November 10th Evan Piermont (Royal Holloway University London )
Location and time: Maison des Sciences Économiques, S17 , 12-13h
Title : TBA
Summary: TBA
Friday, November 24th Peter Hammond (CAGE, University of Warwick )
Location and time: Maison des Sciences Économiques, S17 , 12-13h
Title : Prerationality in Enlivened Decision Trees
Summary: In principle a decision-making agent's possible decisions and their uncertain consequences can be modelled and formally analysed using a decision tree. Yet except in relatively trivial cases, practicality puts bounds on the size and complexity of any tree that can be analysed properly. When the agent faces a sequence of decisions, the decision tree that the agent analyses may become "enlivened" between successive decisions by the addition of new nodes and new branches, possibly involving extensions to the set of states of the world, as well as enrichments of the consequence domain. My talk will first illustrate the concept of an enlivened decison tree by means of examples involving: (i) Homer's tale of Odysseus and the Sirens; (ii) José Luis Borges' "El Aleph", as a literary example of an unbounded model of the universe; (iii) births, marriages, and deaths; (iv) in economics, the related concepts of innovation and entrepreneurship in Joseph Schumpeter's 1911 "Theory of Economic Development"; (v) in decision theory, George Shackle's concept of “unexpected events”, as well as Nassim Nicholas Taleb's of a "true" black swan, and the work of John Kay and Mervyn King on radical uncertainty; (vi) the games of Go and Chess. Nevertheless, one can model uncertainty about the ultimate retrospective value of any decision that the agent might make within whatever tree captures the current level of awareness. This allows the arguments of consequentialist decision theory that imply subjective expected utility maximization to be extended from standard to enlivened decision trees.
Friday, December 1st Gaëtan Fournier (Aix-Marseille School of Economics)
Location and time: Maison des Sciences Économiques, S17 , 12-13h
Title : Turnout in spatial competition
Summary:
Abstract: We examine two public policies aimed at increasing voter turnout in electoral spatial competition: reducing the cost of voting and modifying the financial incentives provided to parties. We find that these policies have different and disjoint impacts, when one is efficient, the other does not affect turnout. We characterize the voters' characteristics under which each policy is effective.
January 19th, Patrick Lahr (ENS-Paris Saclay)
Location and time: Maison des Sciences Économiques, S17 , 12-13h
Title : On the Geometry of Multi- Dimensional Screening
Summary : Extreme points of the set of implementable allocations are tied to the two central questions of mechanism design: What can be implemented, and what is optimal? We characterize the extreme points within a linear, multi-dimensional screening model. Our characterization links mechanism design to Gale’s (1954) theory of indecomposable convex bodies. Whenever the type space is one-dimensional, extreme points are simple, never requiring a larger menu size than under the agent’s first best. In stark contrast with a multi-dimensional type space any IC mechanism exhausting a maximal set of feasibility constraints is arbitrarily close to an extreme point. This conclusion is obtained even when considering only those extreme points that are maximizers of specific classes of objective functionals, such as revenue. Our conclusions apply to monopolistic selling, finite delegation, and veto bargaining.
January 26th, Sudipta Sarangi (Virginia Tech)
Location and time: Maison des Sciences Économiques, S17 , 12-13h
Title : TBA
Summary : TBA
February 16th, Jobst Heitzig (Potsdam Institute for Climate Impact Research)
Location and time: Maison des Sciences Économiques, S17 , 12-13h
Title : TBA
March 15th :Sylvain Carré (Université Paris Dauphine)
Title : Security and efficiency in DeFi lending
Location and time: Maison des Sciences Économiques, S17 , 12-13h
Summary :
March 22nd :Jean-Yves Gnabo, Université de Namur
Title : TBA
Location and time: Maison des Sciences Économiques, S17 , 12-13h
Summary : TBA
March 29th :David Frankel (Melbourne business school)
Title : TBA
Location and time: Maison des Sciences Économiques, S17 , 12-13h
Summary : TBA
April 5th: Kevin Refett (Arizona State University)
Title : Multiple Recursive Equilibria in Open Economies with Equilibrium Collateral Constraints
Location and time: Maison des Sciences Économiques, S17 , 12-13h
Summary : Using order theoretic techniques, we provide a constructive characterization of the set of minimal state space recursive competitive equilibria (RCE) in the canonical small open economy models of sudden stops with price dependent collateral constraints. In doing so, we show that multiplicity of RCE arises in these models because of the presence of dynamic complementarities associated with well-known pecuniary externalities that arise in these models. We also provide a complete qualitative theory of robust recursive equilibrium comparative statics in the deep parameters of the model for all RCE, as well as provide tight sufficient conditions for uniqueness of RCE. Extensions of the results to more general models of sudden stops are also discussed.
April 19th: Federica Ceron (GATE)
Title: Prioritize and Choose: an axiomatic characterization of the Knapsack and Greedy budgeting rules
Location and time: Maison des Sciences Économiques, S17 , 12-13h
Summary: We investigate the axiomatic properties of two popular budget allocation rules over discrete goods, the knapsack and the greedy rules. Goods are described by a price and a utility value. The knapsack rule selects the affordable bundle that maximizes the sum of the utility values attached to its items, while the greedy one sequentially selects the items with the highest utility until the budget is exhausted. We show that, despite their differences, these rules belong to the same family of budget allocation rules, the family of Prioritize and Choose rules, which we characterized axiomatically.
April 26th: Charles-Thierry Lacaussade (Université Paris Dauphine)
Title: European option pricing with market frictions and elicitation of probability distortion functions
Location and time: Maison des Sciences Économiques, S17 , 12-13h
Summary: This paper considers an asset pricing model assuming the absence of arbi- trage, the existence of market frictions and the Put-Call Parity. This model constitutes a special case of the Choquet Pricing Rule where the non-additive probability measure (or capacity) is the objective probability measure distorted by a weighting function. The necessary conditions for a Choquet Pricing Rule to be a Rank-Dependent Pricing Rule are given in the finite and the infinite cases. Subsequently, the empirical validity of the Put-Call and Call-Put Pari- ties assumptions is tested. The Rank-Dependent Pricing Rule is then calibrated on Bid and Ask call option prices from the S&P500, utilizing two new families of distortion functions tailored for flexibility, along with two other functions referred to as (Generalized) Neo-Additive Capacity. The impact of time to expiration (time value) and moneyness (intrinsic value) on the shape of the dis- tortion function is investigated. The resulting models exhibit always a greater accuracy compared to the benchmark (linear model). Moreover, the calibrated distortion functions display a remarkably similar shape. The results from the calibration procedure allow us, through the inverted S-shape distortion func- tion, to conclude the risk-seeking behaviour of the market in evaluating call options prices. Finally, the robustness of the calibration is confirmed on an- other dataset.
May 3rd : Tamas Solymosi (Corvinus University of Budapest)
Title : On core allocations in many-to-one assignment markets
Summary: We consider a two-sided market, one side formed by a set of firms and the other by a set of workers. Firms want to hire many workers, up to each firm’s capacity, but each worker can work for only one firm. We assume firms value groups of workers additively. A coalitional game is introduced where the worth of a coalition is the highest value that can be obtained by matching firms and workers in the coalition without violating the capacity of each firm.
Although it is well-known that the core of this model is non-empty, the structure of the core has not been fully investigated. To the known dissimilarities with the one-to-one assignment game, we add that the bargaining set does not coincide with the core and the kernel may not be included in the core. Besides, not all extreme core allocations can be obtained by means of a lexicographic maximization or a lexicographic minimization procedure.
On the positive side, the maximum and minimum core allocations are characterized in two ways: axiomatically and by means of easily verifiable properties of an associated directed graph. Regarding the remaining extreme core allocations of the many-to-one assignment game, we propose a lexicographic procedure that, for each order on the set of workers, sequentially maximizes or minimizes each player's core payoff. This procedure provides all extreme core allocations.
May 17th : Gerd Muehlheusser (University of Hamburg)
Title : Honesty of groups: Effects of size and gender composition (with A. Roider, T. Promann, & N. Wallmeier)
Location and time: Maison des Sciences Économiques, S17 , 12-13h
Summary: This paper studies unethical behavior by groups and provides systematic evidence on how lying decisions are affected by group size and group gender composition. We conduct an online experiment with 1,677 participants (477 groups) where group members can communicate with each other via a novel video chat tool. Our key findings are that (i) larger groups lie more, (ii) all-male groups stand out in their proclivity to lie, (iii) already the first female in a group causes an honesty shift, and (iv) group behavior cannot be fully explainedby members’ individual honesty preferences.
May 24th : José Heleno Faro (Insper, Brésil)
Title : The peculiarity criteria (with M. Ribeiro)
Location and time: Maison des Sciences Économiques, S17 , 12-13h
Summary: We study a broad class of preferences over menus (or opportunity sets) that obey the independence of common alternatives axiom and admit a representation that suits the peculiarity criteria, that is, there exists a utility function V over the collection of all menus in which the menu A is at least as good a B if and only if the value V(A\B) is greater or equal than V(B\A). We show that, under mild conditions, the standard utility maximization model is incompatible with this criteria. Further, in dealing with some special cases, we discuss the well-known class of additive representations and characterize a novel representation called maximum peculiarity criteria.
June 7th : Jeanne Mansoux (CES)
Title : Climate scenarios and low-carbon targets of companies: A theoretical approach on alignment strategies and market equilibrium
Location and time: Maison des Sciences Économiques, S17 , 12-13h
Summary: This paper introduces a two-phase model formalizing the concept of alignment to a climate scenario within an economy of publicly traded companies and investors. During the first phase, companies must make a choice between announcing their commitment to low-carbon target, which compels them to abate their emissions, or refusing to make any announcement. Their decision is based on a required minimum level of abatement and on their ability to abate their greenhouse gas emissions. In the second phase, investors make their portfolio allocation decisions based on the companies’ announcements, which provide signals on the long-term climate risk exposure of stocks. We show that companies with the highest abilities always have profit opportunities to commit to low-carbon targets. We also identify a cost to announcing a low-carbon target in the climate risk premium of stock returns. Finally, we show that the investors’ climate preferences are essential to maximizing the number of companies committing to low-carbon targets.
June 14th : Adam Dominiak (Virginia Tech, USA)
Title : Communication under Ambiguity
Location and time: Maison des Sciences Économiques, S17 , 12-13h
Summary: We study communication in ambiguous environments. Agents communicate individual decisions sequentially. Based on the signal that an agent receives, she revises her private information. When signals are ambiguous, we show that agents may agree to disagree forever. Although the learning process converges, leading to common knowledge of the individual decisions, the decisions differ no matter how long the communication lasts. Such persistent disagreements are precluded in Bayesian frameworks endowed with a common prior. When communication is private and nobody is excluded from it, we show that ambiguity-free communication is a necessary and sufficient condition for a consensus to emerge. However, when communication is public, ambiguity-free communication is only sufficient for reaching a consensus. We apply our model to economic forecasting, providing an alternative account for persistently disagreeing forecasters. Finally, we outline an "advisor's dilemma" and explain why deliberation in democracy may never end.