Essays in mechanism design
Abstract/Contents
- Abstract
- This thesis consists of three papers in mechanism design. Chapter 1 is based on a paper of mine entitled "Quality Disclosure and Price Discrimination". Chapter 2 is based on "Penalty, Voting, and Collusion: a Common Agency Approach to Industrial Regulation and Political Power". Chapter 3 is based on "Partitional Information Revelation under Renegotiation". A key framework in mechanism design is screening: a principal who designs the contract induces agents with private information to select certain action(s) or bundle(s). Classical results are second-best distortion and Myerson ironing, which are derived when the agency involves a single task (or tasks independent across agents), an agent's information is privately known by himself, and there is full commitment. Chapter 1 considers incentivizing tasks that are related through a resource constraint. It studies the second-degree price discrimination when the supply quality follows some exogenous distribution, or more specifically, the design of information and pricing in a monopolistic market with product quality dispersion. The main message is that optimality requires a partial disclosure, and finer results on the allocation distortion depend on the heterogeneity of the buyers' preference. When such preference over assignment, i.e., quality distribution, has a uni-dimensional sufficient statistics in the quality space, the optimal distortion resembles Myerson's ironing and the optimal disclosure takes a partitional form. For more general preference, the optimal distortion departs from Myerson's result. Chapter 2 considers eliciting signals informative of the agent's private information from multiple sources. An interesting case is by considering a voting committee as the principal, where voting aggregates welfare-relevant information but faces corruptive incentives. The key insights are that the optimal rule is a binary verdict, resembling the principle of maximum deterrence, and the corruptive incentives typically push the optimal voting rule towards unanimity. Chapter 3 considers commitment with renegotiation: the counterparties can stick to the previously signed long-term contract or revise it with mutual consent. More specifically, it studies a long-term relationship between a seller and a buyer whose valuation (for a per-period service or a rental good) is private. In such a dynamic game, a new dimension of mechanism design, namely intertemporal type separation, arises as its induced belief-updating affects the rent extraction--efficiency tradeoff. The main message is that all PBE share the following property in the progressive screening process: at each history, the seller partitions the posterior support into countable intervals and offers a pooling contract to each of these intervals.
Description
Type of resource | text |
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Form | electronic resource; remote; computer; online resource |
Extent | 1 online resource. |
Place | California |
Place | [Stanford, California] |
Publisher | [Stanford University] |
Copyright date | 2020; ©2020 |
Publication date | 2020; 2020 |
Issuance | monographic |
Language | English |
Creators/Contributors
Author | Chen, Weixin, (Researcher in microeconomic theory) |
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Degree supervisor | Segal, Ilya |
Thesis advisor | Segal, Ilya |
Thesis advisor | Carroll, Gabriel |
Thesis advisor | Sugaya, Takuo |
Degree committee member | Carroll, Gabriel |
Degree committee member | Sugaya, Takuo |
Associated with | Stanford University, Department of Economics |
Subjects
Genre | Theses |
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Genre | Text |
Bibliographic information
Statement of responsibility | Weixin Chen. |
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Note | Submitted to the Department of Economics. |
Thesis | Thesis Ph.D. Stanford University 2020. |
Location | electronic resource |
Access conditions
- Copyright
- © 2020 by Weixin Chen
- License
- This work is licensed under a Creative Commons Attribution Non Commercial 3.0 Unported license (CC BY-NC).
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