A theoretical and computational basis for CATNETS

The main content of this report is the identification and definition of market mechanisms for Application Layer Networks (ALNs). On basis of the structured Market Engineering process, the work comprises the identification of requirements which adequate market mechanisms for ALNs have to fulfill. Subsequently, two mechanisms for each, the centralized and the decentralized case are described in this document. These build the theoretical foundation for the work within the following two years of the CATNETS project. --Grid Computing

Theoretical and Computational Basis for Economical Ressource Allocation in Application Layer Networks - Annual Report Year 1

This paper identifies and defines suitable market mechanisms for Application Layer Networks (ALNs). On basis of the structured Market Engineering process, the work comprises the identification of requirements which adequate market mechanisms for ALNs have to fulfill. Subsequently, two mechanisms for each, the centralized and the decentralized case are described in this document. --Grid Computing

Environmental analysis for application layer networks

Die zunehmende Vernetzung von Rechnern über das Internet lies die Vision von Application Layer Netzwerken aufkommen. Sie umfassen Overlay Netzwerke wie beispielsweise Peer-to-Peer Netzwerke und Grid Infrastrukturen unter Verwendung des TCP/IP Protokolls. Ihre gemeinsame Eigenschaft ist die redundante, verteilte Bereitstellung und der Zugang zu Daten-, Rechen- und Anwendungsdiensten, während sie die Heterogenität der Infrastruktur vor dem Nutzer verbergen. In dieser Arbeit werden die Anforderungen, die diese Netzwerke an ökonomische Allokationsmechanismen stellen, untersucht. Die Analyse erfolgt anhand eines Marktanalyseprozesses für einen zentralen Auktionsmechanismus und einen katallaktischen Markt. --Grid Computing

Screening, Competition, and Job Design

In recent decades, many firms offered more discretion to their employees, often increasing the productivity of effort but also leaving more opportunities for shirking. These “high-performance work systems” are difficult to understand in terms of standard moral hazard models. We show experimentally that complementarities between high effort discretion, rent-sharing, screening opportunities, and competition are important driving forces behind these new forms of work organization. We document in particular the endogenous emergence of two fundamentally distinct types of employment strategies. Employers either implement a control strategy, which consists of low effort discretion and little or no rent-sharing, or they implement a trust strategy, which stipulates high effort discretion and substantial rent-sharing. If employers cannot screen employees, the control strategy prevails, while the possibility of screening renders the trust strategy profitable. The introduction of competition substantially fosters the trust strategy, reduces market segmentation, and leads to large welfare gains for both employers and employees

Enabling Privacy-preserving Auctions in Big Data

We study how to enable auctions in the big data context to solve many upcoming data-based decision problems in the near future. We consider the characteristics of the big data including, but not limited to, velocity, volume, variety, and veracity, and we believe any auction mechanism design in the future should take the following factors into consideration: 1) generality (variety); 2) efficiency and scalability (velocity and volume); 3) truthfulness and verifiability (veracity). In this paper, we propose a privacy-preserving construction for auction mechanism design in the big data, which prevents adversaries from learning unnecessary information except those implied in the valid output of the auction. More specifically, we considered one of the most general form of the auction (to deal with the variety), and greatly improved the the efficiency and scalability by approximating the NP-hard problems and avoiding the design based on garbled circuits (to deal with velocity and volume), and finally prevented stakeholders from lying to each other for their own benefit (to deal with the veracity). We achieve these by introducing a novel privacy-preserving winner determination algorithm and a novel payment mechanism. Additionally, we further employ a blind signature scheme as a building block to let bidders verify the authenticity of their payment reported by the auctioneer. The comparison with peer work shows that we improve the asymptotic performance of peer works' overhead from the exponential growth to a linear growth and from linear growth to a logarithmic growth, which greatly improves the scalability

Screening, Competition, and Job Design

In recent decades, many firms offered more discretion to their employees, often increasing the productivity of effort but also leaving more opportunities for shirking. These “high-performance work systems†are difficult to understand in terms of standard moral hazard models. We show experimentally that complementarities between high effort discretion, rent-sharing, screening opportunities, and competition are important driving forces behind these new forms of work organization. We document in particular the endogenous emergence of two fundamentally distinct types of employment strategies. Employers either implement a control strategy, which consists of low effort discretion and little or no rent-sharing, or they implement a trust strategy, which stipulates high effort discretion and substantial rent-sharing. If employers cannot screen employees, the control strategy prevails, while the possibility of screening renders the trust strategy profitable. The introduction of competition substantially fosters the trust strategy, reduces market segmentation, and leads to large welfare gains for both employers and employees.job design; high-performance work systems; screening; reputation; competition; trust; control; social preferences; complementarities

Screening, Competition, and Job Design: Economic Origins of Good Jobs

In recent decades, many firms offered more discretion to their employees, often increasing the productivity of effort but also leaving more opportunities for shirking. These "high-performance work systems" are difficult to understand in terms of standard moral hazard models. We show experimentally that complementarities between high effort discretion, rent-sharing, screening opportunities, and competition are important driving forces behind these new forms of work organization. We document in particular the endogenous emergence of two fundamentally distinct types of employment strategies. Employers either implement a control strategy, which consists of low effort discretion and little or no rent-sharing, or they implement a trust strategy, which stipulates high effort discretion and substantial rent-sharing. If employers cannot screen employees, the control strategy prevails, while the possibility of screening renders the trust strategy profitable. The introduction of competition substantially fosters the trust strategy, reduces market segmentation, and leads to large welfare gains for both employers and employees.Job design, high-performance work systems, screening, reputation, competition, trust, control, social preferences, complementarities, SOEP

Screening, Competition, and Job Design: Economic Origins of Good Jobs

In recent decades, many firms offered more discretion to their employees, often increasing the productivity of effort but also leaving more opportunities for shirking. These "high-performance work systems" are difficult to understand in terms of standard moral hazard models. We show experimentally that complementarities between high effort discretion, rent-sharing, screening opportunities, and competition are important driving forces behind these new forms of work organization. We document in particular the endogenous emergence of two fundamentally distinct types of employment strategies. Employers either implement a control strategy, which consists of low effort discretion and little or no rent-sharing, or they implement a trust strategy, which stipulates high effort discretion and substantial rent-sharing. If employers cannot screen employees, the control strategy prevails, while the possibility of screening renders the trust strategy profitable. The introduction of competition substantially fosters the trust strategy, reduces market segmentation, and leads to large welfare gains for both employers and employees.job design, high-performance work systems, screening, reputation, competition, trust, control, social preferences, complementarities

The Firm as a Pool of Factor Complementarities

This paper presents a new approach to the theory of the firm by identifying factor complementarities as central to the determination of the firm’s boundaries. The factor complementarities may take a variety of forms: technological and informational complementarities, as well as economies of scale and scope. We examine the tradeoff between the gains from these complementarities and transactions costs. In so doing, we must abandon the standard dichotomy between the determinants of plant size and firm size. The influence of factor complementarities on firm size is examined in partial and general equilibrium frameworks.