Sharing Non-Anonymous Costs of Multiple Resources Optimally

In cost sharing games, the existence and efficiency of pure Nash equilibria fundamentally depends on the method that is used to share the resources' costs. We consider a general class of resource allocation problems in which a set of resources is used by a heterogeneous set of selfish users. The cost of a resource is a (non-decreasing) function of the set of its users. Under the assumption that the costs of the resources are shared by uniform cost sharing protocols, i.e., protocols that use only local information of the resource's cost structure and its users to determine the cost shares, we exactly quantify the inefficiency of the resulting pure Nash equilibria. Specifically, we show tight bounds on prices of stability and anarchy for games with only submodular and only supermodular cost functions, respectively, and an asymptotically tight bound for games with arbitrary set-functions. While all our upper bounds are attained for the well-known Shapley cost sharing protocol, our lower bounds hold for arbitrary uniform cost sharing protocols and are even valid for games with anonymous costs, i.e., games in which the cost of each resource only depends on the cardinality of the set of its users

An Optimal Incentive System For Real Estate Agents

This article presents an alternative system for selling real estate. It overcomes the well-known deficiencies of the percentage commission system. In our system, the agent purchases the property from the seller and simultaneously receives a put option. The put option gives the agent the right to put the property back to the original owner. It is shown that this system has many of the desirable properties of a dealer system, while avoiding some of the problems that are inherent in that system.

Systemization of Pluggable Transports for Censorship Resistance

An increasing number of countries implement Internet censorship at different scales and for a variety of reasons. In particular, the link between the censored client and entry point to the uncensored network is a frequent target of censorship due to the ease with which a nation-state censor can control it. A number of censorship resistance systems have been developed thus far to help circumvent blocking on this link, which we refer to as link circumvention systems (LCs). The variety and profusion of attack vectors available to a censor has led to an arms race, leading to a dramatic speed of evolution of LCs. Despite their inherent complexity and the breadth of work in this area, there is no systematic way to evaluate link circumvention systems and compare them against each other. In this paper, we (i) sketch an attack model to comprehensively explore a censor's capabilities, (ii) present an abstract model of a LC, a system that helps a censored client communicate with a server over the Internet while resisting censorship, (iii) describe an evaluation stack that underscores a layered approach to evaluate LCs, and (iv) systemize and evaluate existing censorship resistance systems that provide link circumvention. We highlight open challenges in the evaluation and development of LCs and discuss possible mitigations.Comment: Content from this paper was published in Proceedings on Privacy Enhancing Technologies (PoPETS), Volume 2016, Issue 4 (July 2016) as "SoK: Making Sense of Censorship Resistance Systems" by Sheharbano Khattak, Tariq Elahi, Laurent Simon, Colleen M. Swanson, Steven J. Murdoch and Ian Goldberg (DOI 10.1515/popets-2016-0028

Self-fulfilling liquidity dry-ups

Secondary markets for long-term assets might be illiquid due to adverse selection. In a model in which moral hazard is confined to project initiation, I find that: (1) when agents expect a liquidity dry-up on such markets, they optimally choose to self-insure through the hoarding of non-productive but liquid assets; (2) such a response has negative externalities as it reduces ex-post market participation, which worsens adverse selection and dries up market liquidity; (3) liquidity dry-ups are Pareto inefficient equilibria; (4) the Government can rule them out. Additionally, when agents face idiosyncratic, privately known, illiquidity shocks, I show that: (5) it increases market liquidity; (6) illiquid agents are better-off when they can credibly disclose their liquidity position, but transparency has an ambiguous effect on risk-sharing possibilities.Liquidity, Liquidity Dry-ups, Financial Crises, Hoarding, Adverse Selection, Self-insurance

Risk-sharing and Liability in the Control of Stochastic Externalities

This paper analyzes alternative policies for controlling stochastic externalities, considering both the incentive and the risk-sharing effects of each. When polluter actions are unobservable so that regulation is not possible, alternative liability rules including zero, partial, and full liability are compared. When actions are observable, then regulation is possible, and the use of regulation is compared to the use of liability. The principal-agent paradigm provides the analytical approach used to determine the efficient policy choice. The effect of the availability of insurance is also addressed. This paper concludes with a discussion of the implications of the analysis for the control of stochastic marine pollution.Environmental Economics and Policy, Resource /Energy Economics and Policy, Risk and Uncertainty,

Mergers, Investment Decisions and Internal Organisation

We analyse the effects of investment decisions and firms’ internal organisation on the efficiency and stability of horizontal mergers. In our framework synergies are endogenous and there might be internal conflict within merged firms. We show that often stable mergers do not lead to more efficiency and may even lead to efficiency losses. These mergers lead to lower welfare, suggesting that a regulator should be careful in assuming that possible efficiency gains of a merger will be effectively realised. Moreover, the paper offers a possible explanation for merger failures. ZUSAMMENFASSUNG - (Fusionen, Investitionsentscheidungen und unternehmensinterne Organisation) Wir analysieren die Auswirkungen von Investitionsentscheidungen und internen Organisationsstrukturen auf die Effizienz und Stabilität von horizontalen Firmenzusammenschlüssen. In unserer Untersuchung sind Synergien endogen und es können interne Konflikte in dem fusionierten Unternehmen auftreten. Es zeigt sich, dass "stabile" Fusionen häufig nicht zu mehr Effizienz, sondern sogar zu Effizienzverlusten führen können. Da solche Firmenzusammenschlüsse zu einer geringeren Wohlfahrt führen, sollte der Regulierer nicht ungeprüft annehmen, dass potentielle Wohlfahrtsgewinne auch immer tatsächlich erreicht werden. Außerdem bietet das Papier eine mögliche Erklärung für das Scheitern von Fusionen.Horizontal Mergers, Investment, Efficiency gains, Internal Conflict.