The referendum incentive compatibility hypothesis: Some new results using information messages

We report results from a laboratory experiment that allows us to test the incentive compatibility hypothesis of hypothetical referenda used in CV studies through the public or private provision of information messages. One of the main methodological issues about hypothetical markets regards whether people behave differently when bidding for a public good through casting a ballot vote than when they are privately purchasing an equivalent good. This study tried to address the core of this issue by using a good that can be traded both as private and public: information messages. This allows the elimination of confounding effects associated with the specific good employed. In our case information dispels some of the uncertainty about a potential gain from a gamble. So, the approximate value of the message can be inferred once the individual measure of risk aversion is known. Decision tasks are then framed in a systematic manner according to the hypothetical vs real nature of the decision and the public vs private nature of the message. A sample of 536 university students across three countries (I, UK and NZ) participated into this lab experiment. The chosen countries reflect diversity in exposure to the practice of advisory (NZ) and abrogative (Italy) referenda, with the UK not having any exposure to it. Under private provision the results show that the fraction of participants unwilling to buy information is slightly higher in the real treatment than in the hypothetical one. Under public provision, instead, there is no statistical difference between real and hypothetical settings, confirming in part the finding of previous researchers. A verbal protocol analysis of the thought processes during choice highlights that public provision of information systematically triggers concerns and motivations different from those arising under the private provision setting. These findings suggest that the incentive compatibility of public referenda is likely to rely more on affective and psychological factors than on the strategic behaviour assumptions theorised by economists

Mechanism Design for Team Formation

Team formation is a core problem in AI. Remarkably, little prior work has addressed the problem of mechanism design for team formation, accounting for the need to elicit agents' preferences over potential teammates. Coalition formation in the related hedonic games has received much attention, but only from the perspective of coalition stability, with little emphasis on the mechanism design objectives of true preference elicitation, social welfare, and equity. We present the first formal mechanism design framework for team formation, building on recent combinatorial matching market design literature. We exhibit four mechanisms for this problem, two novel, two simple extensions of known mechanisms from other domains. Two of these (one new, one known) have desirable theoretical properties. However, we use extensive experiments to show our second novel mechanism, despite having no theoretical guarantees, empirically achieves good incentive compatibility, welfare, and fairness.Comment: 12 page

On the willingness-to-pay for Elodea removal in the Fairbanks North Star Borough

Thesis (M.S.) University of Alaska Fairbanks, 2018The empirical research conducted herein addresses a public need for the funding of a project that would eradicate Elodea in the Fairbanks North Star Borough (FNSB). The eradication project has been outlined and approved by State and Federal agencies and has gathered funding to begin the eradication process. The study aims to develop a mean willingness-to-pay value for survey participants by shifting the funding burden to property tax payers. This body of work includes a primer on Elodea in the borough, an overview of contingent valuation, a parametric approach to willingness-to-pay, and results of the study conducted on Fairbanks property owners. The average willingness-to-pay per survey respondent is $50.32. In addition, 72$10, $30,$60, or $120 per year for 4 years to fund the proposed program. A penalized maximum log-likelihood estimation found that the most significant predictors for the likelihood of a yes vote are the respondent's perceived risk to the ecosystem and recreational opportunities. Additionally, the respondents concern for the use of herbicides in the borough to treat the Elodea infestation is highly significant. The high level of prior knowledge throughout the survey indicates that respondents had established view on Elodea prior to the survey.Introduction -- An Elodea Primer for the Fairbanks North Star Borough -- What is Elodea? -- Natural and Recreational Impacts of Elodea Infestations -- Treatment Options -- Elodea Eradication Project in the Interior -- Literature Review -- Introduction to Contingent Valuation -- A Brief History on Contingent Valuation -- Willingness-to-Pay vs. Willingness-to-Accept -- Convergent Validity for Hypothetical Dichotomous Choice Formats -- Willingness-to-Pay Elicitation Methods -- A Parametric Approach to Referendum Based Willingness-To-Pay -- Introduction -- Random Utility Model -- Penalized Log Likelihood Maximization for Dichotomous Choice Data -- Willingness-To-Pay Estimations -- Willingness-To-Pay for Elodea Removal in the Fairbanks North Star Borough -- Sampling -- Survey instrument -- Data -- Logit estimation and mean WTP results -- Discussion of Results -- Conclusion -- Appendix A -- Appendix B -- References