Optimal Entry Coordination in Auctions with Entry Cost (Work in Progress)
First Draft
This paper presents a framework for coordinating agents into a non-exclusive auction with bidding costs. Agents
possess private values, yet a cost is incurred to both obtain this information and to participate in the auction.
The entry strategy in a symmetric mixed equilibrium is, in general, inefficient and suboptimal. By applying the
revelation principle, the optimal communication strategy is identified. The auctioneer can ensure trade occurs,
earn higher revenue, and improve efficiency with the optimal recommendation. For any finite number of agents,
the optimal recommendation structure is solely dependent on the cost, with only two possible numbers of entrants appearing in the auction. The optimal recommendation structure is ex-ante efficient.
The International Politics of Debris in Earth's Orbit: A Mechanism Design Approach (with C.-Philipp Heller, Work in Progress)
We analyze the problem of the international management of debris in Earth's orbits using a mechanism design approach. We take into account the incentives of each country to report its benefits from the exploitation of Earth's orbits, the incentives to participate in an agreement and the overall feasibility of an agreement. When there are only two space-faring countries the threat of terminating the agreement may be sufficiently credible to allow them to efficiently manage the risk of space debris. When there are many countries, the defection of a single country can no longer be credibly deterred by threatening to terminate the entire agreement. We show that common investment in a debris management system, access to which may be denied to non-participants, may allow space-faring countries to achieve better outcomes than under the business-as-usual scenario. We discuss how our proposed agreements might be implemented.
When to Hire an Influencer? (with Yushan Meng, Work in Progress)
First Draft
We study a model of strategic communication in which a reviewer sends a signal to a buyer, whose subsequent action determines the payoffs of three parties: buyers, the reviewer, and the seller. The buyer can be either informed or uninformed. We characterise the seller's optimal equilibrium under the conditions that the product price exceeds the no-reviewer benchmark and trade occurs with non-zero probability. We show that the reviewer may truthfully reveal the match value. Relative to the baseline without a reviewer, the seller chooses to hire a reviewer only if the reviewer's cost of effort is sufficiently low; the threshold cost depends on the fraction of uninformed consumers. When reinterpreted through a persuasion model, we establish an equivalence of information disclosure between strategic communication and Bayesian persuasion. To address the issue of multiple equilibria, we provide conditions for equilibrium selection, which can also be derived through a signalling framework.
Disreputable Influencer (with Mingzhao Dai, Yifei Dai and Yushan Meng, Work in Progress)
Abstract will come soon.
