Mechanisms without transfers for fully biased agents by Deniz Kattwinkel

Join us for this weeks Microeconomics Research Seminar, Autumn Term 2022.

Dr Deniz Kattwinkel from the Department of Economics, University College London will present research on Mechanisms without transfers for fully biased agents.

Abstract

A principal must decide between two options. Which one she prefers depends on the private information of two agents. One agent always prefers the first option; the other always prefers the second. Transfers are infeasible. One application of this setting is the efficient division of a fixed budget between two competing departments. We first characterize all implementable mechanisms under arbitrary correlation. Second, we study when there exists a mechanism that yields the principal a higher payoff than she could receive by choosing the ex-ante optimal decision without consulting the agents. In the budget example, a profitable mechanism exists if and only if the information of one department is also relevant for the expected returns of the other department.

When types are independent this result generalizes to a setting with n agents. We apply this insight to derive necessary and sufficient conditions for the existence of a profitable mechanism in the n-agent allocation problem.

This seminar will be held at 4pm at the Colchester Campus in the Economics Common room, 5B.307. This event is open to all levels of study and is also open to the public.

To register your place, please contact the seminar organisers.