Welcome !

Simon Jantschgi


I work on microeconomic theory, in particular market design and game theory, using both theory and empirics. I am particularly interested in markets with indivisible goods, budget constraints and frictions such as transaction costs.


Currently, I am a Postdoctoral Research Fellow at the University of Oxford (Economics), a Non-Stipendiary Research Fellow at Nuffield College, and a member of the Zurich Center for Market Design.


You can reach me at <simon.jantschgi{at}economics.ox.ac.uk>.

Background


I hold a BSc (2018) and an MSc (2019) in Mathematics from ETH Zurich. I received the ETH medal, and the award for the best teaching assistant at the Mathematics Department.


I received a joint PhD in Sociology and Mathematics & Computer Science from the Universities of Zurich and Grenoble-Alpes (2023), where I was supervised by Heinrich Nax and Bary Pradelski. In addition, I graduated from the Excellence Program of the UZH Digital Society Initiative (2022). 


In the fall of 2023, I was a Postdoctoral Research Fellow at the Simons Laufer Mathematical Sciences Institute in Berkeley (Mathematics and Computer Science of Market and Mechanism Design).


I was fortunate to bring my research to application at Orderfox (matching platform for industrial manufacturing), the Academic Sports Association Zurich, and Rally (investment platform for collectible assets). 

Research

The Hidden Cost of 'Zero-Commission'
Working Paper (Link to appear soon)

In today's financial landscape, traditional exchanges compete against online trading platforms. A critical point of competition centers around transaction costs. While traditional exchanges adhere to transparent transaction cost structures, many online trading platforms, under the guise of `zero-commission trading,' conceal transaction costs within their bid-ask spread. In this paper, I show that hidden transaction costs induce volatility in markets that would be stable, if transparent transaction costs were charged. This additional volatility manifests in predictable price cycles that traders can exploit through strategic market entry. To compete with additional profit opportunities on a market platform charging hidden transaction costs, a market platform charging transparent transaction costs must reduce them below the optimal monopolist level to attract traders. Within this duopoly context, I establish the existence of a market equilibrium, where more risk-averse traders favor a platform charging transparent transaction costs, whereas those with lower risk aversion opt for a platform charging hidden transaction costs.


Markets and Transaction Costs
(with Heinrich Nax, Bary Pradelski, and Marek Pycia)
23rd ACM Conference on Economics and Computation (EC'22), 2022

Transaction costs are omnipresent in markets but are often omitted in economic models. In markets in which the price is set to equate revealed supply and demand, we show that the presence of transaction costs can fundamentally alter incentive and welfare properties. We categorize transaction costs into two types. Asymptotically uninfluenceable transaction costs---such as fixed and price fees---preserve the key properties of the model without transaction costs, namely asymptotic strategyproofness, efficiency, and robustness to misspecified beliefs and to aggregate uncertainty. In contrast, influenceable transaction costs---such as spread fees---lead to complex strategic behavior (price guessing) that may result in severe market failure. When some transaction costs are collected as fees by a revenue-maximizing intermediary, we show that the same categorization determines the intermediary's behavior. Any asymptotically uninfluenceable fees can maximize the revenue if optimally scaled, while purely influenceable fees lead to zero revenue. Furthermore, all optimally-scaled fees lead to the same welfare. Our insights extend beyond markets equalizing demand and supply.


Double Auctions: A Unified Treatment
(with Heinrich Nax, Bary Pradelski, and Marek Pycia)
Working Paper

We define a double auction mechanism, treating in a unified way finite and infinite markets, allowing for ties in reported values, and not imposing any regularity assumptions. It is the first such definition. In all markets, our Double Auction implements market clearing and a Walrasian equilibrium. In finite markets our Double Auction nests as special cases the standard k-Double Auction and in infinite markets the textbook model of continuous and strictly monotone demand and supply. Finally, we establish the convergence of finite to infinite Double Auctions. 


Competitive Market Behavior: Convergence and Asymmetry in the Experimental Double Auction
(with Barbara Ikica, Heinrich Nax, Diego Nunez Duran, and Bary Pradelski)
International Economic Review 64 (3), 2023, p.1087-1126

We conducted a large number of controlled continuous double auction experiments to reproduce and stress-test the phenomenon of convergence to competitive equilibrium under private information. A common finding across a total of 104 markets (involving over 1,700 subjects and over 100 markets) is convergence after a handful of trading periods. Initially, however, there is evidence for an inherent asymmetry that favors buyers, which is expressed in symmetric markets by deal prices that are significantly below equilibrium prices. Analysis of over 80,000 observations of individual bids and asks helps identify several empirical ingredients contributing to the observed phenomena including higher initial aggressiveness amongst buyers than sellers.


Resistors in Dual Networks
(with Martina Furrer and Norbert Hungerbühler)
Electron. J. Graph Theory Appl. 8(2), 257-265 (2020)

Let G be a finite plane multigraph and G' its dual. Each edge e of G is interpreted as a resistor of resistance Re, and the dual edge e' is assigned the dual resistance Re' :=1 / Re. Then the equivalent resistance re over e and the equivalent resistance re' over e' satisfy re / Re+re' / Re'=1. We provide a graph theoretic proof of this relation by expressing the resistances in terms of sums of weights of spanning trees in G and G' respectively. 

Talks

Teaching

Markets and Norms
(Spring 2021 & Spring 2023 @University of Zurich)
Teaching assistant and guest lecturer

This course introduces market theories and introduces aspects of social norms that are relevant in market interactions. Game theory and other tools from economics and sociology are used for the analysis. 

Controversies in Game Theory
(Spring 2022 @ETH and University of Zurich)
Teaching assistant

This course provides an in-depth introduction to issues in game theory motivated by real-world issues related to the tensions that may result from interactions in groups, where individual and collective interests may conflict. The course integrates theory from various disciplines. 

Introduction to Game Theory
(Spring 2020 @ETH Zurich)
Teaching assistant

This course introduces the foundations of game theory with a focus on its basic mathematical principles. It treats models of social interaction, conflict and cooperation, the origin of cooperation, and concepts of strategic decision making behavior. Examples, applications, theory, and the contrast between theory and empirical results are particularly emphasized. 

Computational Social Science
(Fall 2019 @ETH Zurich)
Guest lecturer

The seminar aims at three-fold integration: (1) bringing modeling and computer simulation of techno-socio-economic processes and phenomena together with related empirical, experimental, and data-driven work, (2) combining perspectives of different scientific disciplines (e.g. sociology, computer science, physics, complexity science, engineering), (3) bridging between fundamental and applied work. 

Geometry, Linear Algebra I, and Linear Algebra II
(Spring 2015 - Fall 2019 @ETH Zurich)
Teaching assistant and supervisor of the study center for undergraduates