In whose backyard? A generalized bidding approach

We analyze situations in which a group of agents (and possibly a designer) have to reach a decision that will affect all the agents. Examples of such scenarios are the location of a nuclear reactor or the siting of a major sport event. To address the problem of reaching a decision, we propose a one-stage multi-bidding mechanism where agents compete for the project by submitting bids. All Nash equilibria of this mechanism are efficient. Moreover, the payoffs attained in equilibrium by the agents satisfy intuitively appealing lower bounds..externalities, bidding, implementation

Implementation of the Ordinal Shapley Value for a three-agent economy

We propose a simple mechanism that implements the Ordinal Shapley Value (Pérez-Castrillo and Wettstein 2005) for economies with three or less agents.

Implementation of the Ordinal Shapley Value for a three-agent economy

We propose a simple mechanism that implements the Ordinal Shapley Value (Pérez-Castrillo and Wettstein [2005]) for economies with three or less agents.Ordinal Shapley Value, implementation, mechanism design

An Ordinal Shapley Value for Economic Environments

We propose a new solution concept to address the problem of sharing a surplus among the agents generating it. The sharing problem is formulated in the preferences-endowments space. The solution is defined in a recursive manner incorporating notions of consistency and fairness and relying on properties satisfied by the Shapley value for Transferable Utility (TU) games. We show a solution exists, and refer to it as an Ordinal Shapley value (OSV). The OSV associates with each problem an allocation as well as a matrix of concessions ``measuring'' the gains each agent foregoes in favor of the other agents. We analyze the structure of the concessions, and show they are unique and symmetric. Next we characterize the OSV using the notion of coalitional dividends, and furthermore show it is monotone in an agent's initial endowments and satisfies anonymity. Finally, similarly to the weighted Shapley value for TU games, we construct a weighted OSV as well.Non-Transferable utility games, Shapley value, consistency, fairness

Smooth Multibidding Mechanisms

We propose a smooth multibidding mechanism for environments where a group of agents have to choose one out of several projects. Our proposal is related to the multibidding mechanism (Pérez-Castrillo and Wettstein, 2002) but it is “smoother” in the sense that small variations in an agent’s bids do not lead to dramatic changes in the probability of selecting a project. This mechanism is shown to possess several interesting properties. First, the equilibrium outcome is unique. Second, it ensures an equal sharing of the surplus that it induces. Finally, it enables reaching an outcome as close to efficiency as is desired.mechanism design, NIMBY

Bidding for the Surplus: Realizing Efficient Outcomes in General Economic Environments

In this paper, we consider two classes of economic environments. In the first type, agents are faced with the task of providing local public goods that will benefit some or all of them. In the second type, economic activity takes place via formation of links. Agents need both to both form a network and decide how to share the output generated. For both scenarios, we suggest a bidding mechanism whereby agents bid for the right to decide upon the organization of the economic activity. The subgame perfect equilibria of this game generate efficient outcomes.Bidding, Implementation, Networks, Public goods

Jean Tirole : Premio Nobel de Economía 2014

Jean Tirole ha sido galardonado con el Premio Nobel de Economía el 13 de octubre 2014. Este economista francés ha recibido el reconocimiento de la academia sueca, según el comunicado emitido por ésta, por sus aportaciones «al análisis sobre el poder de mercado y la regulación». En otras palabras, aunque representa sólo una parte de su trabajo, Jean Tirole ha recibido el premio por sus aportaciones a la Economía Industrial, en las que las Matemáticas tienen un papel importante

Optimal Enforcement Policy and Firms’ Emissions and Compliance with Environmental Taxes

In a market where firms with different characteristics decide upon both the level of emissions and their reports, we study the optimal audit policy for an enforcement agency whose objective is to minimize the level of emissions. We show that it is optimal to devote the resources primarily to the easiest-to-monitor firms and to those firms that value pollution the less. Moreover, unless the budget for monitoring is very large, there are always firms that do not comply with the environmental objective and others that do comply; but all of them evade the environmental taxes.environmental taxes, optimal audit policy

Incentives in University Technology Transfers

There are two main ways in which the knowledge created in universities has been transferred to firms: licensing agreements and the creation of spin-offs. In this paper, we describe the main steps in the transfer of university innovations, the main incentive issues that appear in this process, and the contractual solutions proposed to address them.