Publications

Costless Information and Costly Verification: A Case for Transparency (with Jan Knoepfle) @ Journal of Political Economy 2023

Comment on Jackson and Sonnenschein (2007) “Overcoming Incentive Constraints by Linking Decisions”  (with Ian Ball and  Matthew O. Jackson) @ Econometrica 2023

Corrigendum to “Role of Linking Mechanisms in Multitask  Agency with Hidden Information” [JET, 2010] (with Ian Ball) @ Journal of Economic Theory 2023

Working papers

Optimal Decision Mechanisms for Juries: Acquitting the Guilty (with Alexander Winter)

A group of privately informed agents has to choose between two alternatives. How should a principal design the decision rule if agents are known to be biased in favor of one of the options? We address this question within the classical Condorcet jury setting. Applications include the optimal decision mechanisms for boards of directors, political committees, and trial juries. 

The optimal mechanism is a non-monotonic voting mechanism. In the terminology of the court example, when jurors are more eager to convict than the lawmaker (principal), then the optimal mechanism convicts the defendant if and only if neither too many nor to few jurors vote to convict. This kind of mechanism accords with a judicial procedure from ancient Jewish law as recorded in the Talmud.

Robust Robustness (with Ian Ball)

To find distributionally robust mechanisms, it is standard to use a maxmin criterion: each mechanism is evaluated according to its payoff guarantee over all priors in a specified ambiguity set. We show that a maxmin optimal mechanism may perform poorly when priors are slightly perturbed. We call an ambiguity set robust if each payoff guarantee over the ambiguity set extends continuously to priors that are sufficiently near the ambiguity set (in the weak topology). Continuous moment sets, Wasserstein balls, and Prokhorov balls are robust. Support sets and total variation balls are not. We show that an ambiguity set is robust if and only if the induced preference relation satisfies a new continuity axiom that reflects the topology on the state space.

Quota Mechanisms: Robustness and Finite-Sample Performance (with Ian Ball)

Quota mechanisms are commonly used to elicit private information when agents face multiple decisions and monetary transfers are infeasible. As the number of decisions grows large, quotas asymptotically implement the same set of social choice functions as do separate mechanisms with transfers. We analyze the robustness of quota mechanisms. To set the correct quota, the designer must have precise knowledge of the environment. We show that, without transfers, only trivial social choice rules can be implemented in a prior-independent way. We obtain a tight bound on the decision error that results when the quota does not match the true type distribution. Finally, we show that in a multi-agent setting, quotas are robust to agents' beliefs about each other. Crucially, quotas make the distribution of reports common knowledge.

Probabilistic Verification in Mechanism Design (with Ian Ball), SSRN

Extended abstract accepted at EC'19

We introduce a model of probabilistic verification into the standard mechanism design setting. The principal verifies the agent's type using a statistical test. The result of the test is stochastic; its distribution depends on the agent's true type. The principal commits to a mechanism that assigns a test to each message and then a decision based on the test result. In our framework, the revelation principle holds. We characterize whether each type can be identified with a test. If so, the principal's problem becomes an optimization subject to incentive constraints. Under quasilinear preferences, we solve for revenue-maximizing mechanisms by introducing a new expression for the virtual value that reflects the precision of the tests.

Mechanisms without transfers for fully biased agents (with Axel Niemeyer,  Justus Preusser and Alexander Winter) 

Extended abstract accepted at EC'22

A principal must decide between two options. Which one she prefers depends on the private information of two agents. One agent always prefers the first option; the other always prefers the second. Transfers are infeasible. One application of this setting is the efficient division of a fixed budget between two competing departments. We first characterize all implementable mechanisms under arbitrary correlation. Second, we study when there exists a mechanism that yields the principal a higher payoff than she could receive by choosing the ex-ante optimal decision without consulting the agents. In the budget example, a profitable mechanism exists if and only if the information of one department is also relevant for the expected returns of the other department. 

When types are independent this result generalizes to a setting with n agents. We apply this insight to derive necessary and sufficient conditions for the existence of a profitable mechanism in the n-agent allocation problem.

Allocation with Correlated Information: Too good to be true 

Extended abstract accepted at EC'20

A principal can allocate an indivisible good to an agent. The agent privately learns the value of the good while the principal privately learns the cost. Value and cost are correlated. The agent wants to have the good in any case. The principal wants to allocate whenever the value exceeds the cost. She cannot use monetary transfers to screen the agent. 

I study how the principal utilizes her information in the optimal mechanism: when the correlation is negative, she bases her decision only on the costs, and when the correlation is positive, she screens the agent. To this end, she forgoes her best allocation opportunities: when the agent reports high valuations but her own costs are low. Under positive correlation, these realizations are unlikely; the principal will find them too good to be true. In contrast to standard results, this optimal mechanism may not allocate to a higher value agent with higher probability. I discuss applications to intra-firm allocations, task-delegation, and industry self-regulation.

Work in progress

Surplus extraction and the burden of proof (with Justus Preusse)

An agent holds a surplus which their principal wants to extract. The size of the surplus is the agent’s private information; they decide how much of their surplus they initially reveal. In addition, both parties can costly produce conclusive proof that reveals the true and full size of the surplus. The agent’s liability is bounded by the revealed size of their surplus, while the principal is equipped with additional funds. The principal designs and commits to a contract that allocates the burden of proof and the shares of the surplus contingent on the agent’s reports and the evidence presented. We characterize the principal’s optimal contract. 

Applications include: wealth taxation, investment-, and procurement contracts.

Strategic Understatement (with Carl Heese)

We study the design of quality certificates. The certificate holder (sender) tries to convince a receiver of his quality. The receiver benefits from more precise knowledge about the sender’s quality and can costly verify the sender's quality. We show that if the certificate is too selective, in all equilibria, senders of very high quality do not present the certificate; they pool with low-quality types who do not hold a certificate. The high types forgo a signaling opportunity ("understatement"), but thereby motivate the receiver to costly verify their high quality herself. Conversely, when the certificate is not too selective, there are monotone equilibria where higher types are more likely to present their certificates.

Policy Uncertainty and Signaling in Referenda  (with Carl Heese)

We study voting on a reform for which the implementation is at the discretion of a politician who is biased against the reform. Valuable information about the efficacy of the reform is dispersed among citizens, and by voting, citizens can transmit their information to the politician. When the politician has no discretion, the Condorcet Jury Theorem holds (Feddersen & Pesendorfer, 1998). When the politician has full discretion, in all equilibria, there is no information transmission at all (Battaglini, 2017). We consider a scenario of "intermediate discretion" akin to political referenda. When the majority votes against the reform, the status quo is kept. Otherwise, the politician is bound to implement the reform but can choose the degree of implementation. This creates one-sided signaling incentives for the voters. Even when the politician is only slightly biased against the referendum, there are equilibria with "oversignaling" for which the reform always passes, even in the situations where all citizens and the politician prefer it not to. 

Organisation

I'm co-organizing the yearly Southeast Theory Festival with Ludvig Sinander:  Southeast Theory Festival (2022,2023,2024,...)

I'm co-organizing UCL's Centre for Theoretical and Behavioural Economics seminar with Duarte Gonçalves 

I co-organized a conference with Vasiliki Skreta, Amir Habibi, and Mia Guo Bai  in remembrance of Konrad Mierendorff this June: Conference for Konrad 

Teaching

I'm teaching ECON0029: Economics of Information (undergrad) @ UCL

I'm teaching ECON0083: Foundations and Frontiers of Mechanism Design (PhD) @ UCL