[ { "id": "authors:2xr9q-wnz20", "collection": "authors", "collection_id": "2xr9q-wnz20", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20220511-150585300", "type": "article", "title": "The role of information in a continuous double auction: An experiment and learning model", "author": [ { "family_name": "Anufriev", "given_name": "Mikhail", "orcid": "0000-0002-1842-6814", "clpid": "Anufriev-Mikhail" }, { "family_name": "Arifovic", "given_name": "Jasmina", "orcid": "0000-0002-7092-6541", "clpid": "Arifovic-Jasmina" }, { "family_name": "Ledyard", "given_name": "John", "clpid": "Ledyard-J-O" }, { "family_name": "Panchenko", "given_name": "Valentyn", "orcid": "0000-0003-3144-7502", "clpid": "Panchenko-Valentyn" } ], "abstract": "We analyze trading in a modified continuous double auction market. We study how more or less information about trading in a prior round affects allocative and informational efficiency. We find that more information reduces allocative efficiency in early rounds relative to less information but that the difference disappears in later rounds. Informational efficiency is not affected by the information differences. We complement the experiment with simulations of the Individual Evolutionary Learning model which, after modifications to account for the CDA, seems to fit the data reasonably well.", "doi": "10.1016/j.jedc.2022.104387", "issn": "0165-1889", "publisher": "Elsevier", "publication": "Journal of Economic Dynamics and Control", "publication_date": "2022-08", "volume": "141", "pages": "Art. No. 104387" }, { "id": "authors:rbga4-d5742", "collection": "authors", "collection_id": "rbga4-d5742", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20190711-102156844", "type": "article", "title": "Introduction to the Symposium on Research on Social Dilemmas", "author": [ { "family_name": "Oliveira", "given_name": "Angela C. M.", "clpid": "Oliveira-A-C-M" }, { "family_name": "Salmon", "given_name": "Timothy C.", "clpid": "Salmon-T-C" }, { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" }, { "family_name": "Plott", "given_name": "Charles R.", "orcid": "0000-0001-8363-3628", "clpid": "Plott-C-R" }, { "family_name": "Putterman", "given_name": "Louis", "clpid": "Putterman-L" } ], "abstract": "In 2002 Elinor Ostrom and some of her colleagues organized a working group on Testing Theoretical Models of Individual Behavior in Dynamic Social Dilemmas and held the first meeting of this group at Indiana University Bloomington in 2003. There have now been five subsequent meetings of different incarnations of this group (2006, Max Planck Institute, Jena; 2008, Florida State University; 2010, Rice University; 2013, California Institute of Technology; 2015, Brown University) prior to the most recent one, the seventh in total, held in 2017 at the University of Massachusetts Amherst. With each of these meetings, the size of the group and scope of the work presented has changed and shifted as new people become part of the group and as the research questions relevant to social dilemma researchers change over time. As a way of commemorating these events, the organizers have felt that it would be useful to create special issues or symposia in journals related to the meetings as a way of capturing a snapshot of the issues at the frontier of social dilemma research at each point in time. The 2013 meeting at Cal Tech was the first to take place after Ostrom's death in 2012, and it produced two such special issues, in part to memorialize her: one at the Journal of Theoretical Politics edited by Eric Coleman and Rick Wilson published in 2016, and one at Experiment Economics edited by Jimmy Walker and Mark Isaac published in 2015. In conjunction with the 2017 meetings at UMass Amherst, a call for papers went out for submissions to this current Symposium issue inviting submissions from people who have been affiliated with this group and to others working in the area so that we could present a compelling set of papers that encompass a broad range of the work aimed at helping us to better understand issues related to social dilemmas. The journal received a large number of submissions of very high\u2010quality work that was sent through the standard review process for the journal. In the end we are publishing eight of those submissions and are pleased with the quality and breadth of coverage these papers represent. We are also happy that while we received and will be publishing papers by authors with a direct association with these meetings, we also received many submissions by authors with no connection to the meetings and will be publishing several of these as well.", "doi": "10.1111/ecin.12824", "issn": "0095-2583", "publisher": "Wiley", "publication": "Economic Inquiry", "publication_date": "2020-01", "series_number": "1", "volume": "58", "issue": "1", "pages": "9-11" }, { "id": "authors:aja3h-jjv83", "collection": "authors", "collection_id": "aja3h-jjv83", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20180718-090852064", "type": "article", "title": "Learning to alternate", "author": [ { "family_name": "Arifovic", "given_name": "Jasmina", "orcid": "0000-0002-7092-6541", "clpid": "Arifovic-J" }, { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" } ], "abstract": "The Individual Evolutionary Learning (IEL) model explains human subjects' behavior in a wide range of repeated games which have unique Nash equilibria. Using a variation of 'better response' strategies, IEL agents quickly learn to play Nash equilibrium strategies and their dynamic behavior is like that of humans subjects. In this paper we study whether IEL can also explain behavior in games with gains from coordination. We focus on the simplest such game: the 2 person repeated Battle of Sexes game. In laboratory experiments, two patterns of behavior often emerge: players either converge rapidly to one of the stage game Nash equilibria and stay there or learn to coordinate their actions and alternate between the two Nash equilibria every other round. We show that IEL explains this behavior if the human subjects are truly in the dark and do not know or believe they know their opponent's payoffs. To explain the behavior when agents are not in the dark, we need to modify the basic IEL model and allow some agents to begin with a good idea about how to play. We show that if the proportion of inspired agents with good ideas is chosen judiciously, the behavior of IEL agents looks remarkably similar to that of human subjects in laboratory experiments.", "doi": "10.1007/s10683-018-9568-1", "issn": "1386-4157", "publisher": "Springer", "publication": "Experimental Economics", "publication_date": "2018-09", "series_number": "3", "volume": "21", "issue": "3", "pages": "692-721" }, { "id": "authors:q1t2j-eab44", "collection": "authors", "collection_id": "q1t2j-eab44", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20140425-132301397", "type": "article", "title": "Optimal Dynamic Nonlinear Income Taxes with No Commitment", "author": [ { "family_name": "Berliant", "given_name": "Marcus", "clpid": "Berliant-M" }, { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" } ], "abstract": "We wish to study optimal dynamic nonlinear income taxes. Do real-world taxes share some of their features? What policy prescriptions can be made? We study a two-period model, where the consumers and government each have separate budget constraints in the two periods, so income cannot be transferred between periods. Labor supply in both periods is chosen by consumers. The government has memory, so taxes in the first period are a function of first-period labor income, whereas taxes in the second period are a function of both first- and second-period labor incomes. The government cannot commit to future taxes. Time consistency is thus imposed as a requirement. The main results of the paper show that time-consistent incentive-compatible two-period taxes involve separation of types in the first period and a differentiated lump-sum tax in the second period, provided that the discount rate is high or utility is separable between labor and consumption. In the natural extension of the Diamond () model with quasi-linear utility functions to two periods, an equivalence of dynamic and static optimal taxes is demonstrated, and a necessary condition for the top marginal tax rate on first-period income is found.", "doi": "10.1111/jpet.12061", "issn": "1097-3923", "publisher": "Wiley", "publication": "Journal of Public Economic Theory", "publication_date": "2014-04", "series_number": "2", "volume": "16", "issue": "2", "pages": "196-221" }, { "id": "authors:jcrk9-bqz74", "collection": "authors", "collection_id": "jcrk9-bqz74", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20140410-090653513", "type": "article", "title": "The Speed of Information Revelation and Eventual Price Quality in Markets with Insiders: Comparing Two Theories", "author": [ { "family_name": "Bossaerts", "given_name": "Peter", "orcid": "0000-0003-2308-2603", "clpid": "Bossaerts-P" }, { "family_name": "Frydman", "given_name": "Cary", "clpid": "Frydman-C" }, { "family_name": "Ledyard", "given_name": "John", "clpid": "Ledyard-J-O" } ], "abstract": "Two theoretical literatures, one using Bayesian Nash equilibrium (BNE), and the other using noisy rational expectations equilibrium (NREE), both provide a foundation for understanding how private information is impounded into asset prices, yet some of their predictions are conflicting. Here, we compare for the first time, the two theories using data from carefully controlled laboratory asset markets. In the dynamics, we find strong evidence for BNE theory, although final prices support predictions of the NREE theory. Finally, we document that price volatility increases when information is being impounded in prices.", "doi": "10.1093/rof/rfs049", "issn": "1572-3097", "publisher": "Oxford University Press", "publication": "Review of Finance", "publication_date": "2014-01", "series_number": "1", "volume": "18", "issue": "1", "pages": "1-22" }, { "id": "authors:4yy09-1wd81", "collection": "authors", "collection_id": "4yy09-1wd81", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20130815-092245964", "type": "article", "title": "Efficiency of continuous double auctions under individual evolutionary learning with full or limited information", "author": [ { "family_name": "Anufriev", "given_name": "Mikhail", "clpid": "Anufriev-M" }, { "family_name": "Arifovic", "given_name": "Jasmina", "orcid": "0000-0002-7092-6541", "clpid": "Arifovic-J" }, { "family_name": "Ledyard", "given_name": "John", "clpid": "Ledyard-J-O" }, { "family_name": "Panchenko", "given_name": "Valentyn", "clpid": "Panchenko-V" } ], "abstract": "In this paper we explore how specific aspects of market transparency\nand agents' behavior affect the efficiency of the market outcome. In particular,\nwe are interested whether learning behavior with and without information\nabout actions of other participants improves market efficiency. We consider\na simple market for a homogeneous good populated by buyers and sellers.\nThe valuations of the buyers and the costs of the sellers are given exogenously.\nAgents are involved in consecutive trading sessions, which are organized as\na continuous double auction with order book. Using Individual Evolutionary\nLearning agents submit price bids and offers, trying to learn the most profitable\nstrategy by looking at their realized and counterfactual or \"foregone\" payoffs.\nWe find that learning outcomes heavily depend on information treatments.\nUnder full information about actions of others, agents' orders tend to be\nsimilar, while under limited information agents tend to submit their valuations/\ncosts. This behavioral outcome results in higher price volatility for the latter treatment. We also find that learning improves allocative efficiency when\ncompared to outcomes Zero-Intelligent traders.", "doi": "10.1007/s00191-011-0230-8", "issn": "0936-9937", "publisher": "Springer Verlag", "publication": "Journal of Evolutionary Economics", "publication_date": "2013-07", "series_number": "3", "volume": "23", "issue": "3", "pages": "539-573" }, { "id": "authors:y3ad7-t7p22", "collection": "authors", "collection_id": "y3ad7-t7p22", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20120927-120424918", "type": "article", "title": "Individual evolutionary learning, other-regarding preferences, and the voluntary contributions mechanism", "author": [ { "family_name": "Arifovic", "given_name": "Jasmina", "orcid": "0000-0002-7092-6541", "clpid": "Arifovic-J" }, { "family_name": "Ledyard", "given_name": "John", "clpid": "Ledyard-J-O" } ], "abstract": "The data from experiments with the Voluntary Contributions Mechanism suggest five stylized facts, including the restart effect. To date, no theory has explained all of these facts simultaneously. We merge our Individual Evolutionary Learning model with a variation of heterogeneous other-regarding preferences and a distribution of types to provide a new theory that does. In addition, our theory answers some open questions concerning the data on partners\u2013strangers experiments. One interesting feature of the theory is that being a conditional cooperator is not a type but arises endogenously as a behavior. The data generated by our model are quantitatively similar to data from a variety of experiments, and experimenters, and are insensitive to moderate variations in the parameters of the model. That is, we have a robust explanation for most behavior in VCM experiments.", "doi": "10.1016/j.jpubeco.2012.05.013", "issn": "0047-2727", "publisher": "Elsevier", "publication": "Journal of Public Economics", "publication_date": "2012-10", "series_number": "9-10", "volume": "96", "issue": "9-10", "pages": "808-823" }, { "id": "authors:a0rmb-6mz52", "collection": "authors", "collection_id": "a0rmb-6mz52", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20120607-094141948", "type": "article", "title": "Individual evolutionary learning with many agents", "author": [ { "family_name": "Arifovic", "given_name": "Jasmina", "orcid": "0000-0002-7092-6541", "clpid": "Arifovic-J" }, { "family_name": "Ledyard", "given_name": "John", "clpid": "Ledyard-J-O" } ], "abstract": "Individual Evolutionary Learning (IEL) is a learning model based on the evolution of a population of strategies of an individual agent. In prior work, IEL has been shown to be consistent with the behavior of human subjects in games with a small number of agents. In this paper, we examine the performance of IEL in games with many agents. We find IEL to be robust to this type of scaling. With the appropriate linear adjustment of the mechanism parameter, the convergence behavior of IEL in games induced by Groves\u2013Ledyard mechanisms in quadratic environments is independent of the number of participants.", "doi": "10.1017/S026988891200015X", "issn": "0269-8889", "publisher": "Cambridge University Press", "publication": "Knowledge Engineering Review", "publication_date": "2012-06", "series_number": "2", "volume": "27", "issue": "2", "pages": "239-254" }, { "id": "authors:chz37-kzj03", "collection": "authors", "collection_id": "chz37-kzj03", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20101206-154545200", "type": "article", "title": "Prediction Markets: Alternative Mechanisms for Complex Environments with Few Traders", "author": [ { "family_name": "Healy", "given_name": "Paul J.", "clpid": "Healy-P-J" }, { "family_name": "Linardi", "given_name": "Sera", "clpid": "Linardi-S" }, { "family_name": "Lowery", "given_name": "J. Richard", "clpid": "Lowery-J-R" }, { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" } ], "abstract": "Double auction prediction markets have proven successful in large-scale applications such as elections and sporting events. Consequently, several large corporations have adopted these markets for smaller-scale internal applications where information may be complex and the number of traders is small. Using laboratory experiments, we test the performance of the double auction in complex environments with few traders and compare it to three alternative mechanisms. When information is complex we find that an iterated poll (or Delphi method) outperforms the double auction mechanism. We present five behavioral observations that may explain why the poll performs better in these settings.", "doi": "10.1287/mnsc.1100.1226", "issn": "0025-1909", "publisher": "INFORMS", "publication": "Management Science", "publication_date": "2010-11", "series_number": "11", "volume": "56", "issue": "11", "pages": "1977-1996" }, { "id": "authors:tzztv-kxd49", "collection": "authors", "collection_id": "tzztv-kxd49", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20091106-113059865", "type": "article", "title": "Using Neural Measures of Economic Value to Solve the Public Goods Free-Rider Problem", "author": [ { "family_name": "Krajbich", "given_name": "Ian", "clpid": "Krajbich-I" }, { "family_name": "Camerer", "given_name": "Colin", "orcid": "0000-0003-4049-1871", "clpid": "Camerer-C-F" }, { "family_name": "Ledyard", "given_name": "John", "clpid": "Ledyard-J-O" }, { "family_name": "Rangel", "given_name": "Antonio", "clpid": "Rangel-A" } ], "abstract": "Every social group needs to decide when to provide public goods and how to allocate the costs among its members. Ideally, this decision would maximize the group's net benefits while also ensuring that every individual's benefit is greater than the cost he or she has to pay. Unfortunately, the economic theory of mechanism design has shown that this ideal solution is not feasible when the group leadership does not know the values of the individual group members for the public good. We show that this impossibility result can be overcome in laboratory settings by combining technologies for obtaining neural measures of value (functional magnetic resonance imaging\u2013based pattern classification) with carefully designed institutions that allocate costs based on both reported and neurally measured values.", "doi": "10.1126/science.1177302", "issn": "0036-8075", "publisher": "American Association for the Advancement of Science", "publication": "Science", "publication_date": "2009-10-23", "series_number": "5952", "volume": "326", "issue": "5952", "pages": "596-599" }, { "id": "authors:1x6xs-mhe97", "collection": "authors", "collection_id": "1x6xs-mhe97", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20190814-105349068", "type": "article", "title": "Introduction to the issues in honor of Leonid Hurwicz", "author": [ { "family_name": "Ledyard", "given_name": "John", "clpid": "Ledyard-J-O" } ], "abstract": "In my second year in graduate school in 1965, Stanley Reiter gave me copy of \"Optimality and Efficiency in Resource Allocation Processes\" published in 1959 by Leonid Hurwicz. The article had a remarkable effect on me. I knew immediately that these were the questions I went into economics to study and the precision with which I wanted to carry out that study. At the time there was no word for the area, today we call it Mechanism Design. The field and Leo's role in creating it were recognized with a Nobel Prize in 2007.", "doi": "10.1007/s10058-009-0079-6", "issn": "1434-4742", "publisher": "Springer", "publication": "Review of Economic Design", "publication_date": "2009-04", "series_number": "1-2", "volume": "13", "issue": "1-2", "pages": "1-1" }, { "id": "authors:px5xx-0hh60", "collection": "authors", "collection_id": "px5xx-0hh60", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:LEDjebo09", "type": "article", "title": "An experimental test of combinatorial information markets", "author": [ { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" }, { "family_name": "Hanson", "given_name": "Robin", "clpid": "Hanson-R" }, { "family_name": "Ishikida", "given_name": "Takashi", "clpid": "Ishikida-Takashi" } ], "abstract": "While a simple information market lets one trade on the probability of each value of a single variable, a full combinatorial information market lets one trade on any combination of values of a set of variables, including any conditional or joint probability. In laboratory experiments, we compare the accuracy of simple markets, two kinds of combinatorial markets, a call market and a market maker, isolated individuals who report to a scoring rule, and two ways to combine those individual reports into a group prediction. We consider two environments with asymmetric information on sparsely correlated binary variables, one with three subjects and three variables, and the other with six subjects and eight variables (thus 256 states).", "doi": "10.1016/j.jebo.2008.04.010", "issn": "0167-2681", "publisher": "Elsevier", "publication": "Journal of Economic Behavior & Organization", "publication_date": "2009-02", "series_number": "2", "volume": "69", "issue": "2", "pages": "182-189" }, { "id": "authors:vrtd6-e5w04", "collection": "authors", "collection_id": "vrtd6-e5w04", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:ARRsci08", "type": "article", "title": "The promise of prediction markets", "author": [ { "family_name": "Arrow", "given_name": "Kenneth J.", "clpid": "Arrow-K-J" }, { "family_name": "Forsythe", "given_name": "Robert", "clpid": "Forsythe-R" }, { "family_name": "Gorham", "given_name": "Michael", "clpid": "Gorham-M" }, { "family_name": "Hahn", "given_name": "Robert", "clpid": "Hahn-R" }, { "family_name": "Hanson", "given_name": "Robin", "clpid": "Hanson-R" }, { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" }, { "family_name": "Levmore", "given_name": "Saul", "clpid": "Levmore-S" }, { "family_name": "Litan", "given_name": "Robert", "clpid": "Litan-R" }, { "family_name": "Milgrom", "given_name": "Paul", "clpid": "Milgrom-P" }, { "family_name": "Nelson", "given_name": "Forrest D.", "clpid": "Nelson-F-D" }, { "family_name": "Neumann", "given_name": "George R.", "clpid": "Neumann-G-R" }, { "family_name": "Ottaviani", "given_name": "Marco", "clpid": "Ottaviani-M" }, { "family_name": "Schelling", "given_name": "Thomas C.", "clpid": "Schelling-T-C" }, { "family_name": "Shiller", "given_name": "Robert J.", "clpid": "Shiller-R-J" }, { "family_name": "Smith", "given_name": "Vernon L.", "clpid": "Smith-V-L" }, { "family_name": "Snowberg", "given_name": "Erik", "clpid": "Snowberg-E" }, { "family_name": "Sunstein", "given_name": "Cass R.", "clpid": "Sunstein-C-R" }, { "family_name": "Tetlock", "given_name": "Paul C.", "clpid": "Tetlock-P-C" }, { "family_name": "Tetlock", "given_name": "Philip E.", "clpid": "Tetlock-P-E" }, { "family_name": "Varian", "given_name": "Hal R.", "clpid": "Varian-H-R" }, { "family_name": "Wolfers", "given_name": "Justin", "clpid": "Wolfers-J" }, { "family_name": "Zitzewitz", "given_name": "Eric", "clpid": "Zitzewitz-E" } ], "abstract": "The ability of groups of people to make predictions is a potent research tool that should be freed of unnecessary government restrictions.", "doi": "10.1126/science.1157679", "issn": "0036-8075", "publisher": "American Association for the Advancement of Science", "publication": "Science", "publication_date": "2008-05-16", "series_number": "5878", "volume": "320", "issue": "5878", "pages": "877-878" }, { "id": "authors:p1ac3-63b20", "collection": "authors", "collection_id": "p1ac3-63b20", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20100924-090411858", "type": "article", "title": "A general characterization of interim efficient mechanisms for independent linear environments", "author": [ { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" }, { "family_name": "Palfrey", "given_name": "Thomas R.", "orcid": "0000-0003-0769-8109", "clpid": "Palfrey-T-R" } ], "abstract": "We consider the class of Bayesian environments with independent types, and utility functions which are both quasi-linear in a private good and linear in a one-dimensional private-value type parameter. We call these independent linear environments. For these environments, we fully characterize interim efficient allocation rules which satisfy interim incentive compatibility and interim individual rationality constraints. We also prove that they correspond to decision rules based on virtual surplus maximization, together with the appropriate incentive taxes. We illustrate these techniques with applications to auction design and public good provision.", "doi": "10.1016/j.jet.2005.12.006", "issn": "0022-0531", "publisher": "Elsevier", "publication": "Journal of Economic Theory", "publication_date": "2007-03", "series_number": "1", "volume": "133", "issue": "1", "pages": "441-466" }, { "id": "authors:3tt2k-7b362", "collection": "authors", "collection_id": "3tt2k-7b362", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20170814-080712373", "type": "article", "title": "A New and Improved Design for Multiobject Iterative Auctions", "author": [ { "family_name": "Kwasnica", "given_name": "Anthony M.", "clpid": "Kwasnica-A-M" }, { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" }, { "family_name": "Porter", "given_name": "Dave", "orcid": "0000-0002-4219-3782", "clpid": "Porter-D" }, { "family_name": "DeMartini", "given_name": "Christine", "clpid": "DeMartini-C" } ], "abstract": "In this paper we present a new improved design for multiobject auctions and report on the results of experimental tests of that design. We merge the better features of two extant but very different auction processes, the Simultaneous Multiple Round (SMR) design used by the FCC to auction the electromagnetic spectrum and the Adaptive User Selection Mechanism (AUSM) of Banks et al. (1989, \"Allocating uncertain and unresponsive resources: An experimental approach,\" RAND Journal of Economics, Vol. 20, No. 1, pp. 1\u201325). Then, by adding one crucial new feature, we are able to create a new design, the Resource Allocation Design (RAD) auction process, which performs better than both. Our experiments demonstrate that the RAD auction achieves higher efficiencies, lower bidder losses, higher net revenues, and faster times to completion without increasing the complexity of a bidder's problem.", "doi": "10.1287/mnsc.1040.0334", "issn": "0025-1909", "publisher": "INFORMS", "publication": "Management Science", "publication_date": "2005-03", "series_number": "3", "volume": "51", "issue": "3", "pages": "419-434" }, { "id": "authors:azktr-6jc27", "collection": "authors", "collection_id": "azktr-6jc27", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20171106-141307390", "type": "article", "title": "The First Use of a Combined-Value Auction for Transportation Services", "author": [ { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" }, { "family_name": "Olson", "given_name": "Mark A.", "clpid": "Olson-M-A" }, { "family_name": "Porter", "given_name": "David", "clpid": "Porter-D-P" }, { "family_name": "Swanson", "given_name": "Joseph A.", "clpid": "Swanson-J-A" }, { "family_name": "Torma", "given_name": "David P.", "clpid": "Torma-D-P" } ], "abstract": "Combined-value auctions (CVAs) allow participants to make an offer of a single amount for\na collection of items. These auctions provide value to both buyers and sellers of goods or\nservices in a number of environments, but they have rarely been implemented, perhaps because\nof lack of knowledge and experience. Sears Logistics Services (SLS) is the first procurer\nof trucking services to use a CVA to reduce its costs. In 1993, it saved 13 percent over past\nprocurement practices. Experimental economics played a crucial role in the development, sale,\nand use of the CVA.", "doi": "10.1287/inte.32.5.4.30", "issn": "1526-551X", "publisher": "INFORMS", "publication": "Interfaces", "publication_date": "2002-10-01", "series_number": "5", "volume": "32", "issue": "5", "pages": "4-12" }, { "id": "authors:bq1aa-0q222", "collection": "authors", "collection_id": "bq1aa-0q222", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20170809-145541198", "type": "article", "title": "Inducing liquidity in thin financial markets through combined-value trading mechanisms", "author": [ { "family_name": "Bossaerts", "given_name": "Peter", "orcid": "0000-0003-2308-2603", "clpid": "Bossaerts-P" }, { "family_name": "Fine", "given_name": "Leslie", "clpid": "Fine-Leslie" }, { "family_name": "Ledyard", "given_name": "John", "clpid": "Ledyard-J-O" } ], "abstract": "Asset pricing theory hypothesizes that investors are only interested in portfolios; individual securities are evaluated only in terms of their contribution to portfolio risk and return. Yet, standard financial market design is that of parallel, unconnected markets, whereby investors cannot submit orders in one market conditional on events in others. When markets are thin, this exposes them to substantial execution risk. Fear of ending up with unbalanced portfolios after trading may even keep investors from submitting orders, further eroding liquidity and the ability of markets to equilibrate. The suggested solution is a portfolio trading mechanism referred to as combined-value trading (CVT). Investors are allowed to submit orders for packages of securities and the system matches trades and computes prices by optimally combining portfolio orders in an open book. We study the performance of the CVT mechanism experimentally and compare it to the performance of parallel, unconnected double auctions in experiments with similar parametrization and either a similar number of subjects or substantially thicker markets. We present evidence that our portfolio trading mechanism facilitates equilibration to the extent that the thicker markets do. Inspection of order submission and trade activity reveals that subjects manage to exploit the direct linkages between markets enabled by the CVT system.", "doi": "10.1016/S0014-2921(02)00240-4", "issn": "0014-2921", "publisher": "Elsevier", "publication": "European Economic Review", "publication_date": "2002-10", "series_number": "9", "volume": "46", "issue": "9", "pages": "1671-1695" }, { "id": "authors:cx6jf-szm80", "collection": "authors", "collection_id": "cx6jf-szm80", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20170809-132004799", "type": "article", "title": "The First Use of a Combined-Value Auction for Transportation Services", "author": [ { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" }, { "family_name": "Olson", "given_name": "Mark", "clpid": "Olson-M" }, { "family_name": "Porter", "given_name": "David", "clpid": "Porter-D-P" }, { "family_name": "Swanson", "given_name": "Joseph A.", "clpid": "Swanson-J-A" }, { "family_name": "Torma", "given_name": "David P.", "clpid": "Torma-D-P" } ], "abstract": "Combined-value auctions (CVAs) allow participants to make an offer of a single amount for a collection of items. These auctions provide value to both buyers and sellers of goods or services in a number of environments, but they have rarely been implemented, perhaps because of lack of knowledge and experience. Sears Logistics Services (SLS) is the first procurer of trucking services to use a CVA to reduce its costs. In 1993, it saved 13 percent over past procurement practices. Experimental economics played a crucial role in the development, sale, and use of the CVA.", "doi": "10.1287/inte.32.5.4.30", "issn": "0092-2102", "publisher": "Informs", "publication": "Interfaces", "publication_date": "2002-09", "series_number": "5", "volume": "32", "issue": "5", "pages": "4-12" }, { "id": "authors:qrk3b-cfk59", "collection": "authors", "collection_id": "qrk3b-cfk59", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20160303-152243404", "type": "article", "title": "The approximation of efficient public good mechanisms by simple voting schemes", "author": [ { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" }, { "family_name": "Palfrey", "given_name": "Thomas R.", "orcid": "0000-0003-0769-8109", "clpid": "Palfrey-T-R" } ], "abstract": "This paper compares the performance of simple voting rules, called referenda, to the performance of interim efficient mechanisms for the provision of a public good. In a referendum, voters simply vote for or against the provision of the public good, and production of the public good depends on whether or not the number of yes votes exceeds a prespecified threshold. Costs are shared equally. We show that in large populations for any interim efficient allocation rule, there exists a corresponding referendum that yields approximately the same total welfare when there are many individuals. Moreover, if there is a common value component to the voters' preferences, then there is a unique approximating referendum.", "doi": "10.1016/S0047-2727(00)00161-4", "issn": "0047-2727", "publisher": "Elsevier", "publication": "Journal of Public Economics", "publication_date": "2002-02", "series_number": "2", "volume": "83", "issue": "2", "pages": "153-171" }, { "id": "authors:mb1ry-eq461", "collection": "authors", "collection_id": "mb1ry-eq461", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20170824-093443025", "type": "article", "title": "Mutually Destructive Bidding: The FCC Auction Design Problem", "author": [ { "family_name": "Bykowsky", "given_name": "Mark M.", "clpid": "Bykowsky-M-M" }, { "family_name": "Cull", "given_name": "Robert J.", "clpid": "Cull-R-J" }, { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" } ], "abstract": "In general, synergies across license valuations complicate the auction design process. Theory suggests that a \"simple\" (i.e., non-combinatorial) auction will have difficulty in assigning licenses efficiently in such an environment. This difficulty increases with increases in \"fitting complexity.\" In some environments, bidding may become \"mutually destructive.\" Experiments indicate that a properly designed combinatorial auction is superior to a simple auction in terms of economic efficiency and revenue generation in bidding environments with a low amount of fitting complexity. Concerns that a combinatorial auction will cause a \"threshold\" problem are not borne out when bidders for small packages can communicate.", "doi": "10.1023/A:1008122015102", "issn": "0922-680X", "publisher": "Springer", "publication": "Journal of Regulatory Economics", "publication_date": "2000", "series_number": "3", "volume": "17", "issue": "3", "pages": "205-228" }, { "id": "authors:s3es9-dad66", "collection": "authors", "collection_id": "s3es9-dad66", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20160308-110828694", "type": "article", "title": "Interim Efficiency in a Public Goods Problem", "author": [ { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" }, { "family_name": "Palfrey", "given_name": "Thomas R.", "orcid": "0000-0003-0769-8109", "clpid": "Palfrey-T-R" } ], "contributor": [ { "family_name": "d Aspremont", "given_name": "C" } ], "abstract": "IN THIS PAPER, WE CONSIDER the following classical public goods problem. A group of individuals must decide on a level of a public good that is produced according to constant returns to scale up to some capacity constraint. In addition to deciding the level of public good, the group must decide how to tax the individuals in the group in order to cover the cost. The distribution of the burden of taxation is important because different individuals have different marginal rates of substitution between the private good taxes and the public good, and may have different incomes as well. These individual marginal rates of substitution are private information; that is, each individual knows his or her own marginal rate of substitution, but not those of the other members of the group. Adopting a Bayesian mechanism design framework, we assume that the distribution of marginal rates of substitution is common knowledge.", "doi": "10.1111/1468-0262.00028", "issn": "1468-0262", "publisher": "Econometric Society", "publication": "Econometrica", "publication_date": "1999-03", "series_number": "2", "volume": "67", "issue": "2", "pages": "435-448" }, { "id": "authors:ws948-y7219", "collection": "authors", "collection_id": "ws948-y7219", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20160307-164134782", "type": "article", "title": "A Characterization of Interim Efficiency with Public Goods", "author": [ { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" }, { "family_name": "Palfrey", "given_name": "Thomas R.", "orcid": "0000-0003-0769-8109", "clpid": "Palfrey-T-R" } ], "abstract": "In this paper, we consider the following classical public goods problem. A group of individuals must decide on a level of public good that is produced according to constant returns to scale up to some capacity constraint. In addition to deciding the level of public good, the group must decide how to tax the individuals in the group in order to cover the cost. The distribution of the burden of taxation is important because different individuals have different marginal rates of substitution between the private good (taxes) and the public good, and may have different incomes as well. These individual marginal rates of substitution are private information; that is, each individual knows his or her own marginal rate of substitution, but not those of the other members of the group. Adopting a Bayesian mechanism design framework, we assume that the distribution of marginal rates of substitution is common knowledge.", "doi": "10.1111/1468-0262.00028", "issn": "1468-0262", "publisher": "Econometric Society", "publication": "Econometrica", "publication_date": "1999-02", "series_number": "2", "volume": "67", "issue": "2", "pages": "435-448" }, { "id": "authors:060gj-fe391", "collection": "authors", "collection_id": "060gj-fe391", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20171106-161520759", "type": "article", "title": "Repeated Implementation", "author": [ { "family_name": "Kalai", "given_name": "Ehud", "clpid": "Kalai-E" }, { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" } ], "abstract": "In the traditional static implementation literature it is often impossible for implementors to enforce their optimal outcomes. And when restricting the choice to dominant-strategy implementation, only the dictatorial choices of one of the participants are implementable. Repeated implementation problems are drastically different. This paper provides a strong implementation \"folk theorem:\" for patient implementors, every outcome function they care about is dominant-strategy implementable.", "doi": "10.1006/jeth.1997.2459", "issn": "0022-0531", "publisher": "Elsevier", "publication": "Journal of Economic Theory", "publication_date": "1998-12", "series_number": "2", "volume": "83", "issue": "2", "pages": "308-317" }, { "id": "authors:xrgsy-bp998", "collection": "authors", "collection_id": "xrgsy-bp998", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20170830-083453392", "type": "article", "title": "Experiments Testing Multiobject Allocation Mechanisms", "author": [ { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" }, { "family_name": "Porter", "given_name": "David", "clpid": "Porter-D-P" }, { "family_name": "Rangel", "given_name": "Antonio", "clpid": "Rangel-A" } ], "abstract": "This paper reports the results of over 130 auctions conducted under controlled conditions to examine the robustness of several auction mechanisms to allocate multiple objects. The simultaneous discrete auction process used by the Federal Communications Commission to allocate Personal Communications licenses was contrasted with a sequential auction and a combinatorial auction over a variety of demand conditions. In test environments created to check only the minimum competency of the procedures, the simultaneous discrete auction process produces highly efficient allocations, approaching levels similar to those found with a continuous form of the auction, and it outperforms a sequential auction. However, in environments created to stress test the procedures, a combinatorial auction outperforms the simultaneous discrete auction.", "doi": "10.1111/j.1430-9134.1997.00639.x", "issn": "1058-6407", "publisher": "Wiley", "publication": "Journal of Economics and Management Strategy", "publication_date": "1997-09", "series_number": "3", "volume": "6", "issue": "3", "pages": "639-675" }, { "id": "authors:fbfjy-wpv78", "collection": "authors", "collection_id": "fbfjy-wpv78", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20170821-150043264", "type": "article", "title": "The allocation of a shared resource within an organization", "author": [ { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" }, { "family_name": "Noussair", "given_name": "Charles", "clpid": "Noussair-C-N" }, { "family_name": "Porter", "given_name": "David", "clpid": "Porter-D-P" } ], "abstract": "Many resources such as supercomputers, legal advisors, and university classrooms are shared by many members of an organization. When the supply of shared resources is limited, conflict usually results between contending demanders. If these conflicts can be adequately resolved, then value is created for the organization. In this paper we use the methodology of applied mechanism design to examine alternative processes for the resolution of such conflicts for a particular class of scheduling problems. We construct a laboratory environment, within which we evaluate the outcomes of various allocation mechanisms. In particular, we are able to measure efficiency, the value attained by the resulting allocations as a percentage of the maximum possible value. Our choice of environment and parameters is guided by a specific application, the allocation of time on NASA's Deep Space Network, but the results also provide insights relevant to other scheduling and allocation applications. We find (1) experienced user committees using decision support algorithms produce reasonably efficient allocations in lower conflict situations but perform badly when there is a high level of conflict between demanders, (2) there is a mechanism, called the Adaptive User Selection Mechanism (AUSM), which charges users for time and yields high efficiencies in high conflict situations but, because of the prices paid, in which the net surplus available to the users is less than that resulting from the inefficient user committee (a reason why users may not appreciate 'market solutions' to organization problems) and (3) there is a modification of AUSM in which tokens, or internal money, replaces real money, which results in highly efficient allocations without extracting any of the users' surplus. Although the distribution of surplus is still an issue, the significant increase in efficiency provides users with a strong incentive to replace inefficient user committees with the more efficient AUSM.", "doi": "10.1007/BF02499132", "issn": "0928-5040", "publisher": "Springer", "publication": "Economic Design", "publication_date": "1996-12", "series_number": "1", "volume": "2", "issue": "1", "pages": "163-192" }, { "id": "authors:gm6hb-ngh92", "collection": "authors", "collection_id": "gm6hb-ngh92", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20170830-141350613", "type": "article", "title": "Political competition in a model of economic growth: Some theoretical results", "author": [ { "family_name": "Boylan", "given_name": "Richard T.", "clpid": "Boylan-R-T" }, { "family_name": "Ledyard", "given_name": "John", "clpid": "Ledyard-J-O" }, { "family_name": "McKelvey", "given_name": "Richard D.", "clpid": "McKelvey-R-D" } ], "abstract": "We analyze the role of political competition on the type of economic policies that are selected in a one sector model of economic growth. We identify conditions under which neoclassical optimal growth plans occur, and conditions in which political business cycles occur. We find that the ability commit to multiperiod economic policy leads to less political stability of economic plans.", "doi": "10.1007/BF01213902", "issn": "0938-2259", "publisher": "Springer", "publication": "Economic Theory", "publication_date": "1996-06", "series_number": "2", "volume": "7", "issue": "2", "pages": "191-205" }, { "id": "authors:y3bpp-z6d86", "collection": "authors", "collection_id": "y3bpp-z6d86", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20170707-150810359", "type": "article", "title": "Introduction", "author": [ { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" }, { "family_name": "Palfrey", "given_name": "Thomas R.", "orcid": "0000-0003-0769-8109", "clpid": "Palfrey-T-R" } ], "abstract": "This special issue of Games and Economic Behavior is devoted to what we call experimental game theory, and the intention is threefold. First, we want 10 provide a window into one of the exciting new areas in game theoretic research. Second, we try to collect in one place some of the best current work that spans many of the interesting topics currently being studied. Third, we hope to encourage more game theorists to think about the behavioral and empirical content of their models, particularly in relation to data from carefully controlled laboratory experiments. The belief is that theory and experiment do not develop independently and the expectation is that better interaction will ultimately lead to both better theory and better experiment.", "doi": "10.1006/game.1995.1022", "issn": "0899-8256", "publisher": "Elsevier", "publication": "Games and Economic Behavior", "publication_date": "1995-07", "series_number": "1", "volume": "10", "issue": "1", "pages": "1-5" }, { "id": "authors:a64d9-6w039", "collection": "authors", "collection_id": "a64d9-6w039", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20160303-155008643", "type": "article", "title": "Introduction [to a special issue of Games and Economic Behavior devoted to what we call experimental game theory]...", "author": [ { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" }, { "family_name": "Palfrey", "given_name": "Thomas R.", "orcid": "0000-0003-0769-8109", "clpid": "Palfrey-T-R" } ], "abstract": "This special issue of Games and Economic Behavior is devoted to what\nwe call experimental game theory, and the intention is threefold. First,\nwe want to provide a window into one of the exciting new areas in game\ntheoretic research. Second, we try to collect in one place some of the\nbest current work that spans many of the interesting topics current]y being\nstudied. Third, we hope to encourage more game theorists to think about\nthe behavioral and empirical content of their models, particularly in relation\nto data from carefully controlled laboratory experiments. The belief\nis that theory and experiment do not develop independently and the expectation\nis that better interaction will ultimately lead to both better theory\nand better experiment.", "doi": "10.1006/game.1995.1022", "issn": "0899-8256", "publisher": "Elsevier", "publication": "Games and Economic Behavior", "publication_date": "1995", "series_number": "1", "volume": "10", "issue": "1", "pages": "1-5" }, { "id": "authors:hg793-h4150", "collection": "authors", "collection_id": "hg793-h4150", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20170830-130149209", "type": "article", "title": "Designing organizations for trading pollution rights", "author": [ { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" }, { "family_name": "Szakaly-Moore", "given_name": "Kristin", "clpid": "Szakaly-Moore-K" } ], "abstract": "Regulators and academicians have recently become interested in using a marketable permits program as a new way to control aggregate pollution emissions. Our research focuses on choosing a permit trading mechanism that is both economically efficient and politically viable. We consider an organized trading process and a revenue neutral auction, both of which involve an initial allocation of permits based on past history. Each is tested in a competitive and in a non-competitive environment to determine which mechanism performs best. The results of our research suggest that, overall, the organized trading process outperforms the revenue neutral auction.", "doi": "10.1016/0167-2681(94)90009-4", "issn": "0167-2681", "publisher": "Elsevier", "publication": "Journal of Economic Behavior & Organization", "publication_date": "1994-10", "series_number": "2", "volume": "25", "issue": "2", "pages": "167-196" }, { "id": "authors:pxy7d-tv538", "collection": "authors", "collection_id": "pxy7d-tv538", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20160307-113140393", "type": "article", "title": "Voting and Lottery Drafts as Efficient Public Goods Mechanisms", "author": [ { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" }, { "family_name": "Palfrey", "given_name": "Thomas R.", "orcid": "0000-0003-0769-8109", "clpid": "Palfrey-T-R" } ], "abstract": "This paper characterizes interim efficient mechanisms for public good production and cost allocation in a two-type environment with risk-neutral, quasi-linear preferences and fixed-size projects, where the distribution of the private good, as well as the public goods decision, affects social welfare. An efficient public good decision can always be accomplished by a majority voting scheme, where the number of \"YES\" votes required depends on the welfare weights in a simple way. The results are shown to have a natural geometry and an intuitive interpretation. We also extend these results to allow for restrictions on feasible transfer rules, ranging from the traditional unlimited transfers to the extreme case of no transfers.\n\nFor a range of welfare weights, an optimal scheme is a two-stage procedure which combines a voting stage with a second stage where an even-chance lottery is used to determine who pays. We call this the \"lottery draft mechanism\" Since such a cost-sharing scheme does not require transfers, it follows that in many cases transfers are not necessary to achieve the optimal allocation. For other ranges of welfare weights the second stage is more complicated, but the voting stage remains the same. If transfers are completely infeasible, randomized voting rules may be optimal. The paper also provides a geometric characterization of the effects of voluntary participation constraints.", "doi": "10.2307/2297984", "issn": "0034-6527", "publisher": "Oxford University Press", "publication": "Review of Economic Studies", "publication_date": "1994-04", "series_number": "2", "volume": "61", "issue": "2", "pages": "327-355" }, { "id": "authors:j3tns-nm178", "collection": "authors", "collection_id": "j3tns-nm178", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20171128-165813373", "type": "article", "title": "Using computerized exchange systems to solve an allocation problem in project management", "author": [ { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" }, { "family_name": "Porter", "given_name": "David", "clpid": "Porter-D-P" }, { "family_name": "Rangel", "given_name": "Antonio", "clpid": "Rangel-A" } ], "abstract": "I n this article we study the allocation problem facing the management of a large research and development project. The project management has to allocate resources among competing users to achieve the project goal. Besides the constraint of scarcity, the allocation problem is difficult because users have private parameters that project management requires to know in order to make an optimal allocation. Furthermore, users have incentives to misrepresent the information about these parameters to advance their individual agendas, which can differ from the project goal. A method to solve the allocation problem using computerized exchange institutions is introduced and analyzed. We emphasize that the rules of the exchange should be carefully selected, because different rules produce different results. We use the methodology of experimental economics to demonstrate this conclusion. This research was motivated by JPL's Cassini Mission to Saturn. A computerized exchange described in this article has been implemented by the Cassini Project to assist in the management of the resources used in the design and operation of science instruments.", "doi": "10.1080/10919399409540228", "issn": "1054-1721", "publisher": "Taylor & Francis", "publication": "Journal of Organizational Computing", "publication_date": "1994", "series_number": "3", "volume": "4", "issue": "3", "pages": "271-296" }, { "id": "authors:xvkqr-sec59", "collection": "authors", "collection_id": "xvkqr-sec59", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20170828-145216139", "type": "article", "title": "The design of coordination mechanisms and organizational computing", "author": [ { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" } ], "abstract": "We provide an introduction to a theory of coordination mechanism design and show how to apply it to an assignment problem. The purpose is to introduce those familiar with organizational computing, but unfamiliar with game theory and economics, to the subject. We also describe briefly how we can test new mechanisms before taking them into the field. Finally, we raise some unresolved research questions.", "doi": "10.1080/10919399309540197", "issn": "1054-1721", "publisher": "Taylor & Francis", "publication": "Journal of Organizational Computing", "publication_date": "1993", "series_number": "1", "volume": "3", "issue": "1", "pages": "121-134" }, { "id": "authors:g74e1-vvg20", "collection": "authors", "collection_id": "g74e1-vvg20", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20160525-065131499", "type": "article", "title": "Allocating Uncertain and Unresponsive Resources: An Experimental Approach", "author": [ { "family_name": "Banks", "given_name": "Jeffrey S.", "clpid": "Banks-J-S" }, { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" }, { "family_name": "Porter", "given_name": "David P.", "clpid": "Porter-D-P" } ], "abstract": "We identify an important class of economic problems that arise naturally in several applications: the allocation of multiple resources when there are uncertainties in demand or supply, unresponsive supplies (no inventories and fixed capacities), and significant demand indivisibilities (rigidities). Examples of such problems include: scheduling job shops, airports, or supercomputers; zero-inventory planning; and the allocation and pricing of NASA's planned Space Station. Using experimental methods, we show that the two most common organizations used to deal with this problem, markets and administrative procedures, can perform at very low efficiencies (60-65% efficiency in a seemingly robust example). Thus, there is a need to design new mechanisms that more efficiently allocate resources in these environments. We develop and analyze two mechanisms that arise naturally from auctions used to allocate single-dimensional goods. These new mechanisms involve computer-assisted coordination made possible by the existence of networked computers. Both mechanisms significantly improve on the performance of administrative and market procedures.", "issn": "0741-6261", "publisher": "Blackwell Publishing", "publication": "RAND Journal of Economics", "publication_date": "1989", "series_number": "1", "volume": "20", "issue": "1", "pages": "1-25" }, { "id": "authors:5m9sr-vg645", "collection": "authors", "collection_id": "5m9sr-vg645", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20171114-133240240", "type": "article", "title": "The scope of the hypothesis of Bayesian equilibrium", "author": [ { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" } ], "abstract": "What behavior can be explained as the Bayes equilibrium of some game? The main finding is-almost anything. Given any Bayesian (coordination) game with positive priors, and given any vector of nondominated strategies. there is an increasing transformation of each utility function such that the given vector of strategies is a Bayes (Nash) equilibrium of the transformed game. Any nondominated behavior can be rationalized as Bayes equilibrium behavior. Some comments on the implications of these results for game theory are included.", "doi": "10.1016/0022-0531(86)90020-7", "issn": "0022-0531", "publisher": "Elsevier", "publication": "Journal of Economic Theory", "publication_date": "1986-06", "series_number": "1", "volume": "39", "issue": "1", "pages": "59-82" }, { "id": "authors:0t36a-dte23", "collection": "authors", "collection_id": "0t36a-dte23", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20171121-142550221", "type": "article", "title": "The existence of efficient and incentive compatible equilibria with public goods", "author": [ { "family_name": "Groves", "given_name": "Theodore", "clpid": "Groves-T" }, { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" } ], "abstract": "In our previous paper, \"Optimal Allocation of Public Goods...,\" (1977) we presented a mechanism for determining efficient public goods allocations when preferences are unknown and consumers are free to misrepresent their demands for public goods. We proved the basic welfare theorem for this model: If consumers are competitive in markets for private goods and follow Nash behavior in their choice of demands to report to the mechanism, then equilibria will be Pareto optimal. In this paper we show this result is not vacuous by proving that an equilibria will be Pareto optimal. In this paper we show this result is not vacuous by proving that an equilibrium will exist for a wide class of economies. Our conditions are slightly stronger than those required to prove the existence of a Lindahl equilibrium. In order to rule out the possibility of bankruptcy, we assume additionally that at all Pareto optimal allocations, private goods consumption is bounded away from zero.", "doi": "10.2307/1912820", "issn": "1468-0262", "publisher": "Econometric Society", "publication": "Econometrica", "publication_date": "1980-09", "series_number": "6", "volume": "48", "issue": "6", "pages": "1487-1506" }, { "id": "authors:7tw4m-gc231", "collection": "authors", "collection_id": "7tw4m-gc231", "cite_using_url": "https://resolver.caltech.edu/CaltechAUTHORS:20171121-144342176", "type": "article", "title": "Incentive compatibility and incomplete information", "author": [ { "family_name": "Ledyard", "given_name": "John O.", "clpid": "Ledyard-J-O" } ], "abstract": "It is by now reasonably well known that when informationally decentralized processes are used to make collective choice decisions or to allocate resources, individuals may find it in their interest to distort the information they provide and that these distortions may lead to non-optimal group decisions. In the social choice context, this has been formalized in the Gibbard-Satterthwaite Theorem, which states that all non-dictatorial rules will have this property. In a different context, Hurwicz has shown that there is a private goods neo-classical exchange economy such that any decentralized mechanism which selects Pareto-optimal allocations and which has a no-trade option will have this property. Roberts has provided a similar example in the public goods context. Other work (e.g., Green-Laffont, Groves-Loeb, Hurwicz, and Walker) indicates that, for mechanisms designed to select efficient outcomes, in most environments some agent will have an incentive to misrepresent his information and thus to manipulate the mechanism. All these results lead one to the conjecture that it is almost impossible to design any mechanism for group decisions which is compatible with individual incentives and efficiency.", "doi": "10.1016/0022-0531(78)90047-9", "issn": "0022-0531", "publisher": "Elsevier", "publication": "Journal of Economic Theory", "publication_date": "1978", "volume": "18", "pages": "171-189" } ]