De-class-ifying Microtargeted Political Advertising

In contemporary American politics, Big Tech companies provide sophisticated advertising interfaces that enable anyone to target specific voters by demographic. These companies defend their tools as “neutral” to evade culpability for discriminatory ads. Yet, such microtargeted advertising presents a significant threat to democracy. This Article advances a possible two-pronged solution to bar online platforms from targeting political ads based on a user’s protected class. First, this Article promotes a largely unexplored tactic: extending Title II of the Civil Rights Act into the digital space so that behavior that would be impermissibly discriminatory offline is not permitted online. Second, this Article suggests that impacted users should focus their suits not on ad content, but on platforms’ design choices and the underlying data harnessed for the service of ads. Ultimately, the goal of this Article is to prevent the online voter suppression tactics deployed through these advertising services

Robust design in monotonic matching markets : a case for firm-proposing deferred-acceptance

We study two-sided matching markets among workers and firms. Workers seek one position at a firm but firms may employ several workers. In many applications those markets are monotonic: leaving positions unfilled is costly as for instance, for hospitals this means not being able to provide full service to its patients. A huge literature has advocated the use of stable mechanisms for clearinghouses. The interests among workers and firms are polarized among stable mechanisms, most famously the firm-proposing DA and the worker-proposing DA. We show that for the firm-proposing DA ex-ante incentive compatibility and ex-post incentive compatibility are equivalent whereas this is not necessarily true for the worker-proposing DA. The firm-proposing DA turns out to be more robust than the worker-proposing DA under incomplete information when incentives of both sides of the market are important

Incentive-Compatible Surveys via Posterior Probabilities

We consider the problem of eliciting truthful responses to a survey question when the respondents share a common prior that the survey planner is agnostic about. The planner would therefore like to have a "universal” mechanism, which would induce honest answers for all possible priors. If the planner also requires a locality condition that ensures that the mechanism payoffs are determined by the respondents' posterior probabilities of the true state of nature, we prove that, under additional smoothness and sensitivity conditions, the payoff in the truth-telling equilibrium must be a logarithmic function of those posterior probabilities. Moreover, the respondents are necessarily ranked according to those probabilities. Finally, we discuss implementation issues

Procurement with Unforeseen Contingencies

The procurement of complex projects is often plagued by large cost overruns. One important reason for these additional costs are flaws in the initial design. If the project is procured with a price-only auction, sellers who spotted some of the flaws have no incentive to reveal them early. Each seller prefers to conceal his information until he is awarded the contract and then renegotiate when he is in a bilateral monopoly position with the buyer. We show that this gives rise to three inefficiencies: inefficient renegotiation, inefficient production and inefficient design. We derive the welfare optimal direct mechanism that implements the efficient allocation at the lowest possible cost to the buyer. The direct mechanism, however, imposes strong assumptions on the buyer's prior knowledge of possible flaws and their payoff consequences. Therefore, we also propose an indirect mechanism that implements the same allocation but does not require any such prior knowledge. The optimal direct and indirect mechanisms separate the improvement of the design and the selection of the seller who produces the good

Distributionally robust mechanism design

We study a mechanism design problem where an indivisible good is auctioned to multiple bidders, for eachof whom it has a private value that is unknown to the seller and the other bidders. The agents perceive theensemble of all bidder values as a random vector governed by an ambiguous probability distribution, whichbelongs to a commonly known ambiguity set. The seller aims to design a revenue maximizing mechanism thatis not only immunized against the ambiguity of the bidder values but also against the uncertainty about thebidders’ attitude towards ambiguity. We argue that the seller achieves this goal by maximizing the worst-caseexpected revenue across all value distributions in the ambiguity set and by positing that the bidders haveKnightian preferences. For ambiguity sets containing all distributions supported on a hypercube, we showthat the Vickrey auction is the unique mechanism that is optimal, efficient and Pareto robustly optimal. Ifthe bidders’ values are additionally known to be independent, then the revenue of the (unknown) optimalmechanism does not exceed that of a second price auction with only one additional bidder. For ambiguitysets under which the bidders’ values are dependent and characterized through moment bounds, on the otherhand, we provide a new class of randomized mechanisms, the highest-bidder-lotteries, whose revenues cannotbe matched by any second price auction with a constant number of additional bidders. Moreover, we showthat the optimal highest-bidder-lottery is a 2-approximation of the (unknown) optimal mechanism, whereasthe best second price auction fails to provide any constant-factor approximation guarantee

The Limits of Blockchain Democracy

Should political elections be implemented on the blockchain? Blockchain evangelists have argued that they should. This article sheds light on the potential of blockchain voting procedures and the legal constraints they need to accommodate. In a first step, I discuss potential “democracy benefits” of distributed ledger technology and the legal framework ordering the use of electronic voting systems in general. Comparing U.S. and German constitutional law, I then distill specific normative principles guiding the use of blockchain voting systems. In a second step, I analyze the technical, economic, and normative limitations of blockchain voting procedures. I show that major limitations result from the rules and incentives set by different consensus mechanisms. Moreover, it is not clear whether blockchain technology provides sufficient safeguards to ensure identity verification, the secrecy of ballots, and the verification that ballots are cast as intended, recorded as cast, and counted as recorded. Building on principles from constitutional law, I contend that blockchain technology does not provide sufficient safeguards to satisfy the requirements of democratic voting procedures – at least not in the near future

Robust screening under ambiguity

We consider the problem of screening where a seller puts up for sale an indivisible good, and a buyer with a valuation unknown to the seller wishes to acquire the good. We assume that the buyer valuations are represented as discrete types drawn from some distribution, which is also unknown to the seller. The seller is averse to possible mis-specification of types distribution, and considers the unknown type density as member of an ambiguity set and seeks an optimal pricing mechanism in a worst case sense. We specify four choices for the ambiguity set and derive the optimal mechanism in each case. © 2016, Springer-Verlag Berlin Heidelberg and Mathematical Optimization Society