Publications
Working Papers
- "Efficient Dynamic Mechanisms with Interdependent Valuations," (with Wei He).
- Games and Economic Behavior 97 (2016), 166-173.
- "Agreeing to Agree and Dutch Books," (with Yi-Chun Chen, Ehud Lehrer, Dov Samet, and Eran Shmaya).
- Games and Economic Behavior 93 (2015), 108-116.
- This paper combines the results by Chen and Li, and independently by Lehrer, Samet and Shmaya.
Working Papers
- "Revisiting the Foundations of Dominant-Strategy Mechanisms," (with Yi-Chun Chen).
- Revise and Resubmit, Journal of Economic Theory.
- Abstract: An important question in mechanism design is whether there is any theoretical foundation for the use of dominant-strategy mechanisms. This paper studies the maxmin and Bayesian foundations of dominant-strategy mechanisms in general social choice environments with quasi-linear preferences and private values. We propose a condition called the uniform shortest-path tree that, under regularity, ensures the foundations of dominant-strategy mechanisms. This exposes the underlying logic of the existence of such foundations in the single-unit auction setting, and extends the argument to cases where it was hitherto unknown. To prove this result, we adopt the linear programming approach to mechanism design. In settings where the uniform shortest-path tree condition is violated, maxmin/ Bayesian foundations might not exist. We illustrate this by two examples: bilateral trade with ex ante unidentified traders and auction with type-dependent outside option.
- "Equivalence of Stochastic and Deterministic Mechanisms," (with Yi-Chun Chen, Wei He, and Yeneng Sun).
- Supplementary Material.
- Revise and Resubmit, Econometrica.
- Abstract: We consider a general social choice environment that has multiple agents, a finite set of alternatives, and independent and dispersed information. We prove that for any Bayesian incentive compatible mechanism, there exists an equivalent deterministic mechanism that i) is Bayesian incentive compatible; ii) delivers the same interim expected allocation probabilities/utilities for all agents; and iii) delivers the same ex ante expected social surplus. This result holds in settings with a rich class of utility functions, multi-dimensional types, interdependent valuations, and non-transferable utilities. To prove our result, we develop a new methodology of “mutual purification”, and establish its link with the mechanism design literature.
- "Every Random Choice Rule is Backwards-Induction Rationalizable," (with Rui Tang).
- Revise and Resubmit, Games and Economic Behavior.
- Abstract: Motivated by the literature on random choice and in particular the random utility models, we extend the analysis in Bossert and Sprumont (2013) to include the possibility that players exhibit stochastic preferences over alternatives. We prove that every random choice rule is backwards-induction rationalizable.
- "Associationistic Luce Rule," (with Rui Tang).
- Abstract: We develop an extension of Luce's random choice model that incorporates a role for the association of alternatives. Each alternative is characterized by a salience value, a Luce value, and its associated alternatives. The salience value captures the alternative's ability to attract the decision maker's attention, and the Luce value measures the alternative's desirability. The decision maker is first attracted by some alternative according to a salience-based Luce-type formula, and then chooses among its associated alternatives according to another desirability-based Luce-type formula. While retaining the simplicity of the Luce rule, the theory accommodates some well-known behavioral phenomena in individual choice, such as the attraction effect (violations of regularity), and violations of stochastic transitivity.