Inefficiencies in bargaining - departing from Akerlof and Myerson-Satterthwaite

We consider bargaining problems in which parties have access to outside options. The size of the pie is commonly known and each party privately knows the realization of her outside option. Parties are assumed to have a veto right, which allows them to obtain at least their outside option payoff in any event. Besides, agents can receive no subsidy ex post. We show that inefficiencies are inevitable for virtually all distributions of outside options, as long as the size of the surplus generated by the agreement is uncertain and may be arbitrarily small for all realizations of either party’s outside option. Our inefficiency result holds true whatever the degree of correlation between the distributions of outside options, and even if it is known for sure that an agreement is beneficial. The same insights apply to the bargaining between a buyer and a seller privately informed of their valuations and to public good problems among agents privately informed of their willingness to pay

Evaluation of crowdsourcing Wi-Fi radio map creation in a real scenario for AAL applications

Indoor location at room level plays a key role for providing useful services for Ambient Assisted Living (AAL) applications. Wi-Fi fingerprinting indoor location methods are extensively used due to the widespread availability of WiFi infrastructures. A main drawback of Wi-Fi fingerprinting methods is the temporal cost involved in creating the radio maps. Crowdsourcing strategies have been presented as a way to minimize the cost of radio map creation. In this work, we present an extensive study of the issues involved when using crowdsourcing strategies for that purpose. Results provided by extensive experiments performed in a real scenario by three users during two weeks are presented. The main conclusions are: i) crowdsourcing data improves accuracy location in most studied cases; ii) accuracy of Wi-Fi fingerprinting methods decay along time; iii) device diversity is an important issue even when using the same device model

Fractional transport equations for Levy stable processes

The influence functional method of Feynman and Vernon is used to obtain a quantum master equation for a Brownian system subjected to a Levy stable random force. The corresponding classical transport equations for the Wigner function are then derived, both in the limit of weak and strong friction. These are fractional extensions of the Klein-Kramers and the Smoluchowski equations. It is shown that the fractional character acquired by the position in the Smoluchowski equation follows from the fractional character of the momentum in the Klein-Kramers equation. Connections among fractional transport equations recently proposed are clarified.Comment: 4 page

Viable tax constitutions

Taxation is only sustainable if the general public complies with it. This observation is uncontroversial with tax practitioners but has been ignored by the public finance tradition, which has interpreted tax constitutions as binding contracts by which the power to tax is irretrievably conferred by individuals to government, which can then levy any tax it chooses. However, in the absence of an outside party enforcing contracts between members of a group, no arrangement within groups can be considered to be a binding contract, and therefore the power of tax must be sanctioned by individuals on an ongoing basis. In this paper we offer, for the first time, a theoretical analysis of this fundamental compliance problem associated with taxation, obtaining predictions that in some cases point to a re-interptretation of the theoretical constructions of the public finance tradition while in others call them into question

Random walks and polymers in the presence of quenched disorder

After a general introduction to the field, we describe some recent results concerning disorder effects on both `random walk models', where the random walk is a dynamical process generated by local transition rules, and on `polymer models', where each random walk trajectory representing the configuration of a polymer chain is associated to a global Boltzmann weight. For random walk models, we explain, on the specific examples of the Sinai model and of the trap model, how disorder induces anomalous diffusion, aging behaviours and Golosov localization, and how these properties can be understood via a strong disorder renormalization approach. For polymer models, we discuss the critical properties of various delocalization transitions involving random polymers. We first summarize some recent progresses in the general theory of random critical points : thermodynamic observables are not self-averaging at criticality whenever disorder is relevant, and this lack of self-averaging is directly related to the probability distribution of pseudo-critical temperatures $T_c(i,L)$ over the ensemble of samples $(i)$ of size $L$. We describe the results of this analysis for the bidimensional wetting and for the Poland-Scheraga model of DNA denaturation.Comment: 17 pages, Conference Proceedings "Mathematics and Physics", I.H.E.S., France, November 200

Unilateral versus coordinated effects:comparing the impact on consumer welfare of alternative merger outcomes

The nature of tacitly collusive behaviour often makes coordination unstable, and this may result in periods of breakdown, during which consumers benet from reduced prices. This is allowed for by adding demand uncertainty to the Compte et al. (2002) model of tacit collusion amongst asymmetric rms. Breakdowns occur when a rm cannot exclude the possibility of a deviation by a rival. It is then possible that an outcome with collusive behaviour, subject to long/frequent break downs, can improve consumer welfare compared to an alternative with sustained unilateral conduct. This is illustrated by re-examining the Nestle/Perrier merger analyzed by Compte et al., but now also taking into account the potential for welfare losses arising from unilateral behaviour

Serial Dictatorship: The Unique Optimal Allocation Rule When Information is Endogenous

The study of matching problems typically assumes that agents precisely know their preferences over the goods to be assigned. Within applied contexts, this assumption stands out as particularly counterfactual. Parents typically do invest a large amount of time and resources to find out which school would be best for their children, doctors run costly tests to establish which kidney might be best for a given patient. In this paper I introduce the assumption of endogenous information acquisition into otherwise standard house allocation problems. I find that there is a unique ex ante Pareto-optimal, strategy-proof and non-bossy allocation mechanism: serial dictatorship. This stands in sharp contrast to the very large set of such mechanisms for house allocation problems without endogenous information acquisition

A Cortical Attractor Network with Martinotti Cells Driven by Facilitating Synapses

The population of pyramidal cells significantly outnumbers the inhibitory interneurons in the neocortex, while at the same time the diversity of interneuron types is much more pronounced. One acknowledged key role of inhibition is to control the rate and patterning of pyramidal cell firing via negative feedback, but most likely the diversity of inhibitory pathways is matched by a corresponding diversity of functional roles. An important distinguishing feature of cortical interneurons is the variability of the short-term plasticity properties of synapses received from pyramidal cells. The Martinotti cell type has recently come under scrutiny due to the distinctly facilitating nature of the synapses they receive from pyramidal cells. This distinguishes these neurons from basket cells and other inhibitory interneurons typically targeted by depressing synapses. A key aspect of the work reported here has been to pinpoint the role of this variability. We first set out to reproduce quantitatively based on in vitro data the di-synaptic inhibitory microcircuit connecting two pyramidal cells via one or a few Martinotti cells. In a second step, we embedded this microcircuit in a previously developed attractor memory network model of neocortical layers 2/3. This model network demonstrated that basket cells with their characteristic depressing synapses are the first to discharge when the network enters an attractor state and that Martinotti cells respond with a delay, thereby shifting the excitation-inhibition balance and acting to terminate the attractor state. A parameter sensitivity analysis suggested that Martinotti cells might, in fact, play a dominant role in setting the attractor dwell time and thus cortical speed of processing, with cellular adaptation and synaptic depression having a less prominent role than previously thought