Mechanism design with partially-specified participation games

This paper considers the implementation of an economic outcome under complete information when the strategic and informational details of the participation game are partially-specified. This means that full participation is required to be a subgame-perfect equilibrium for a large variety of extensive modifications of the simultaneous-move participation game in the same vein as Kalai [Large Robust Games, Econometrica 72 (2004) 1631-1665].mechanism design ; robust implementation ; strong Nash equilibrium ; partial subgame perfection ; collusion on participation

Accessible Pareto-Improvements: Using Market Information to Reform Inefficiencies

We study Pareto improvements whose implementation requires knowledge of only market prices and traded quantities, not utility and demand functions. Quantity stabilizations (for example, the Lau, Qian, and Roland model of dual-track reform) give agents the right to repeat their earlier trades and hence require policymakers to know the quantities agents previously exchanged. While reasonable in some partial equilibrium contexts, such knowledge is implausible in general equilibrium. To diminish informational requirements further, we also consider price stabilizations, which hold constant the relative prices that consumers face. Although price stabilizations do not achieve first-best efficiency, they lead to Pareto-improvements and production efficiency. Moreover, the production efficiency advantage persists under price stabilization but not under quantity stabilization when some firms are not profit-maximizes; this difference can be critical in transition policies for planned economies. In addition to planning, we consider several other applications of quantity and price stabilization, both partial equilibrium and general equilibrium: removal of rent controls, deregulation of a cross-subsidizing public utility, and the entry of an autarkic economy into world trade. Not surprisingly, the most plausible candidates for quantity or price stabilization occur in partial equilibrium settings. Finally, we discuss some difficulties specific to general equilibrium models of transition economies. When the state completely rations trades under planning, it will usually need to operate at a deficit. Under reform, the state must raise revenue to close this deficit, and that will frequently prevent quantity stabilizations from achieving a Pareto improvement. But ex ante deficits do no pose a problem for price stabilization reform strategies.http://deepblue.lib.umich.edu/bitstream/2027.42/39782/3/wp398.pd

Feasible Implementation of Taxation Methods

This paper studies the problem of implementation of taxation methods in one-commodity environments in which the taxable incomes of the (at least two) agents are fixed and not known to the planner. In this problem (unlike most work in implementation theory), the feasible set is unknown to the designer. We first show that feasibility out of equilibrium imposes that the mechanism depend on the environment. Next we present two game forms. In the first one, which requires complete information among the tax payers, each agent reports the incomes of all players to a central agency, and implementation of every taxation method is obtained in Nash, strong and coalition-proof equilibrium. In the second, informational requirements may be somewhat relaxed. One of the agents makes a tax proposal, the others bargain with him, and the services of a central agency are used only to solve disputes between pairs of agents. This game form implements a large class of consistent and monotone taxation methods in subgame perfect equilibrium. Neither mechanism employs the off-equilibrium devices used by the general theory. Partial departures from complete information still allow for implementability. However, under fully private information implementation is not possible.Feasible Implementation; Taxation Methods; Consistency; Decentralization; Information; Flat Tax

Sedimentation-consolidation of a double porosity material

This paper studies the sedimentation-consolidation of a double porosity material, such as lumpy clay. Large displacements and finite strains are accounted for in a multidimensional setting. Fundamental equations are derived using a phenomenological approach and non-equilibrium thermodynamics, as set out by Coussy [Coussy, Poromechanics, Wiley, Chichester, 2004]. These equations particularise to three non-linear partial differential equations in one dimensional context. Numerical implementation in a finite element code is currently being undertaken

Robust Mechanism Design: An Introduction

This essay is the introduction for a collection of papers by the two of us on "Robust Mechanism Design" to be published by World Scientific Publishing. The appendix of this essay lists the chapters of the book. The objective of this introductory essay is to provide the reader with an overview of the research agenda pursued in the collected papers. The introduction selectively presents the main results of the papers, and attempts to illustrate many of them in terms of a common and canonical example, the single unit auction with interdependent values. In addition, we include an extended discussion about the role of alternative assumptions about type spaces in our work and the literature, in order to explain the common logic of the informational robustness approach that unifies the work in this volume.Mechanism design, Robust mechanism design, Common knowledge, Universal type space, Interim equilibrium, Ex post equilibrium, Dominant strategies, Rationalizability, Partial implementation, Full implementation, Robust implementation

Accessible Pareto-Improvements: Using Market Information to Reform Inefficiencies

We study Pareto improvements whose implementation requires knowledge of only market prices and traded quantities, not utility and demand functions. Quantity stabilizations (for example, the Lau, Qian, and Roland model of dual-track reform) give agents the right to repeat their earlier trades and hence require policymakers to know the quantities agents previously exchanged. While reasonable in some partial equilibrium contexts, such knowledge is implausible in general equilibrium. To diminish informational requirements further, we also consider price stabilizations, which hold constant the relative prices that consumers face. Although price stabilizations do not achieve first-best efficiency, they lead to Pareto-improvements and production efficiency. Moreover, the production efficiency advantage persists under price stabilization but not under quantity stabilization when some firms are not profit-maximizes; this difference can be critical in transition policies for planned economies. In addition to planning, we consider several other applications of quantity and price stabilization, both partial equilibrium and general equilibrium: removal of rent controls, deregulation of a cross-subsidizing public utility, and the entry of an autarkic economy into world trade. Not surprisingly, the most plausible candidates for quantity or price stabilization occur in partial equilibrium settings. Finally, we discuss some difficulties specific to general equilibrium models of transition economies. When the state completely rations trades under planning, it will usually need to operate at a deficit. Under reform, the state must raise revenue to close this deficit, and that will frequently prevent quantity stabilizations from achieving a Pareto improvement. But ex ante deficits do no pose a problem for price stabilization reform strategies.Pareto improvements, transition policy, dual-track reforms, international trade, rent control, deregulation

A 3D radiative transfer framework IX. Time dependence

Context. Time-dependent, 3D radiation transfer calculations are important for the modeling of a variety of objects, from supernovae and novae to simulations of stellar variability and activity. Furthermore, time-dependent calculations can be used to obtain a 3D radiative equilibrium model structure via relaxation in time. Aims. We extend our 3D radiative transfer framework to include direct time dependence of the radiation field; i.e., the $\partial I/ \partial t$ terms are fully considered in the solution of radiative transfer problems. Methods. We build on the framework that we have described in previous papers in this series and develop a subvoxel method for the $\partial I/\partial t$ terms. Results. We test the implementation by comparing the 3D results to our well tested 1D time dependent radiative transfer code in spherical symmetry. A simple 3D test model is also presented. Conclusions. The 3D time dependent radiative transfer method is now included in our 3D RT framework and in PHOENIX/3D.Comment: A&A in press, 7 pages, 14 figure

THE FUTURE OF THE WORLD SUGAR MARKET--A SPATIAL PRICE EQUILIBRIUM ANALYSIS

A spatial price equilibrium (SPE) model of the world sugar market is programmed. The model covers more than hundred regions and contains sugar in as a sole product. It has a detailed coverage of policies and bilateral trade agreements. It is programmed as a mixed complementarity problem (MCP) in GAMS and uses the PATH solver. The SPE framework offers considerable advantages over other model approaches applied to the sugar market before. Four scenarios are simulated: A baseline scenario until 2015/16, accounting for implementation of the EU reform and market access commitments already decided upon. The liberalization scenarios include an implementation of the Falconer proposal for the current round of WTO negotiations, a full liberalization by the EU and a liberalization of all sugar policies world-wide. In the latter the world market price increases by around 30%. Results are discussed and related to special properties of the SPE approach. Strengths and weaknesses are identified and an outlook on the further refinement of the analysis is given.Sugar, Partial Equilibrium Model, Spatial Price Equilibrium Model, MCP, Crop Production/Industries, International Relations/Trade, Research Methods/ Statistical Methods,

Imagining Education: Educational Policy and the Labor Earnings Distribution

This paper simulates, within a partial equilibrium framework, the scenarios resulting from the implementation of several educational policies. Then, policies are compared according to their hypothetical results in terms of labor earnings inequality, as measured by the Gini coefficient. Results suggest that educational policies which attempt to guarantee medium qualification produce the lowest inequality even if dispersion in schooling years is high. Policies which attempt to raise tertiary education coverage but do not raise high school coverage as well, lead to rising inequality.Educational policy, economic inequality, schooling.

Imagining Education: Educational Policy and the Labor Earnings Distribution

This paper simulates, within a partial equilibrium framework, the scenarios resulting form the implementation of several educational policies. Then, policies are compared according to their hypothetical results in terms of labor earnings inequality, as measured by the Gini coefficient. Results suggest that educational policies which attempt to guarantee medium qualification produce the lowest inequality even if dispersion in schooling years is high. Policies which attempt to raise tertiary education coverage but do not raise high school coverage as well, lead to rising inequality.Educational policy, economic inequality, schooling