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Regular version of the site

ICEF / FES / NES Workshop in Microeconomics Theory

Event ended
On Thursday, October 14, ICEF, FES and NES will hold the Workshop in Microeconomics Theory.

Date and time: October 14 at 10:00

Venue: 11, Pokrovsky blvd., buiding T, room T510 (or in ZOOM)*

Please register to participate in the event

* ZOOM link will be sent to you closer to the date of the event


Session 1: 10:00 - 11:45

Speaker: Sergey Stepanov (ICEF & FES, HSE)

Persuading Experts

Abstract: A partially-informed principal (she) wants to persuade an agent (he) to exert effort by revealing information about a binary state of nature. We consider two settings. In the worst one, the agent exerts a state-specific effort, and its productivity depends on whether he guessed the state correctly or not. In the second one, the agent exerts effort to learn the state, communicates his information to the principal, and the latter then tries to take a correct decision. In both settings, both parties benefit from a higher output, but effort provision is privately costly for the agent. We obtain full revelation of the principal is information as the optimal persuasion scheme in both settings. Yet, once the principal has her private information, she is tempted to deviate from truthful revelation. We study how full revelation can be achieved or approximated in equilibrium with the help of the principal is compensation scheme, reputation concerns, work overload, overconfidence, and risk-aversion.

Discussant: Mikhail Drugov (NES)

Speaker: Danisz Okulicz (FES, HSE)

Matching agents to fighting clients

Abstract: We study a matching of clients and agents in an environment in which clients are paired and fight battles against each other. The outcome of the battle is determined by the characteristics of agents representing each side. There is an objective ranking of agents and both the agents and the clients want to fight in a battle with as high expected value as possible. We extend the notion of pairwise stability to our environment and show that when the battles are differentiated by difficulty stable matching always exists. At any stable matching, agents are negatively assortatively matched with each other. When the battles are differentiated in terms of value,  stable matching may fail to exist. We discuss the notion of core in this environment and derive conditions under which pairwise stability is a refinement of the core.  The results apply to assigning lawyers to cases, researchers to patent races, and lobbyists to political conflicts.

Discussant: Steven Kivinen (ICEF, HSE)

Speaker: Andrei Savochkin (NES)

Time for Memorable Consumption

Abstract: A consumption event is memorable if the memory of it affects well-being at times after the material consumption. We develop an axiomatic model of memorable consumption in a dynamic setting. Preferences are represented by the present value of the sum of utilities derived at each date from the current consumption and from recollecting the past. We provide foundations for a prominent special case of memory that has the Markovian property. Our model accommodates well-known phenomena in psychology, such as the peak-end rule, duration neglect, and adaptation trends. We analyze the implications of memorable effects on the dynamics of consumers’ purchase decisions and on firms’ optimal marketing strategies. We further examine the model in application to life-cycle consumption-savings decisions.

Discussant: Tatiana Mayskaya (ICEF & FES, HSE)

Session 2: 12:00 - 13:10

Speaker: Mikhail Drugov (NES)

Optimal prizes in tournaments under nonseparable preferences

Abstract: We study rank-order tournaments with risk-averse agents whose utility over money and effort (or leisure) may be nonseparable. We characterize optimal prize schedules when the principal allocates a fixed budget and show how they are determined by the interplay between the properties of noise and the utility function. In particular, the distribution of noise alone determines whether the optimal prize schedule has flat regions where some number of prizes are equal, while the total number of positive prizes depends on both the noise distribution and utility. For unimodal noise distributions, the optimal number of positive prizes is restricted regardless of utility under mild assumptions. Also, while the common wisdom suggests—and it holds in the separable case—that risk aversion pushes optimal prize allocations in the direction of prize sharing, this is no longer true, in general, when the marginal utility of money depends on effort.

Discussant: Sergey Stepanov (ICEF & FES, HSE)

Speaker: Pasha Andreyanov (FES, HSE)

Scoring and Favoritism in Procurement

Abstract: A classic scoring auction is often used to select a supplier based on a combination of price and quality. However, when entry barriers are large, or bidders have to invest into quality prior to the auction, single sourcing might be preferred to avoid wasteful duplication of costs. In a fully symmetric model, we show that while a scoring auction is optimal when constrained to symmetric mechanisms, an unconstrained optimum is often attained at an asymmetric mechanism. For the case of two players, we show that, depending on the degree of uncertainty about the suppliers cost-efficiency, the optimal mechanism takes the form of either scoring, sole sourcing or a mechanism that constitutes a scoring auction with a score floors and score ceilings applied in a discriminatory fashion to otherwise identical bidders.

Discussant: Sergei Izmalkov (NES)

Session 3: 14:40 - 15:50

Speaker: Sergey Kovbasyuk (NES)

Memory and Markets

Abstract: In many environments, including credit and online markets, past records about participants are collected, published, and erased after some time. We study the effects of erasing past records on trade and welfare in a dynamic market where each seller’s quality follows a Markov process and buyers leave feedback about sellers. When the average quality of sellers is low, unlimited records always lead to a market breakdown. Appropriately deleting past records, instead, fosters experimentation and can sustain trade in the long run. Positive and negative records play opposite roles with different intensity, and welfare is maximized for short positive records and long but bounded negative ones. Analogous results obtain within an information design approach, in which an information intermediary simply recommends to uninformed buyers whether to buy from each seller. Our findings have implications for the design of privacy regulations, credit bureaus, and feedback systems in online platforms.

Discussant: Ilya Krasikov (FES, HSE)

Speaker: Tatiana Mayskaya (ICEF & FES, HSE)

Imposing Commitment to Rein in Overconfidence in Learning

Abstract: A rational principal delegates learning to an overconfident agent who overestimates the precision of the information he collects. The principal chooses between two contracts: commitment and flexible. Under the former, the agent commits to the duration of learning in advance; under the latter, the agent decides when to stop learning in real time. The principal never benefits from tying the hands of a rational agent by forcing him to commit. In contrast, when the agent is sufficiently overconfident, the principal optimally offers the commitment contract. When the principal can choose both the contract and the agent’s level of overconfidence, selecting the rational agent is suboptimal when the cost of learning is sufficiently high.

Discussant: Andrei Savochkin (NES)

Session 6: 16:05 - 17:15

Speaker: Ilya Krasikov (FES, HSE)

Screening with Hard Information

Abstract: This paper studies the standard monopolistic screening problem where the buyer takes an imperfect test to learn his value. The key departure from the literature is that the outcome of this test is hard information---if the buyer presents the score it cannot be fudged. The seller commits to a price as a function of buyer's action and the score.  The main result is that efficient tests (that live in a large universe of experiments) are typically one or two threshold tests. This speaks to markets such as housing, diamonds and asset backed securities, and why tests there take a simple form.

Discussant: Sergey Kovbasyuk (NES) 

Speaker: Steven Kivinen (ICEF, HSE)

Тема: On the Manipulability of Equitable Voting Rules

Abstract: We examine the set of k-equitable voting rules introduced by Bartholdi et al. (2021) that are manipulable by groups when there are two alternatives. We introduce L-robust group strategy-proofness (L-RGSP), which is a belief-free notion of group strategy-proofness (Kivinen and Tumennasan, 2021) that restricts coalition sizes to be at most L. Our main result is that, under mild assumptions, simple majority voting is the least manipulable 2-equitable rule. The result follows from the equivalence of 2-RGSP and a comonotonicity condition on the voting rule.

Discussant: Danisz Okulicz (FES, HSE)

Steven Kivinen

Assistant Professor, International College of Economics and Finance

Ilya Krasikov

Assistant Professor

Danisz Okulicz

Assistant Professor, Department of Theoretical Economics

Tatiana Mayskaya

Assistant Professor, International College of Economics and Finance

Sergey Stepanov

Associate Professor

Pasha Andreyanov

Assistant Professor, Department of Theoretical Economics