Mechanism Design
  • "Are Simple Mechanisms Optimal when Agents are Unsophisticated?" (with Piotr Dworczak). NEW!​​
    • Abstract: We study the design of mechanisms involving agents that have limited strategic sophistication. The literature has identified several notions of simple mechanisms in which agents can determine their optimal strategy even if they lack cognitive skills such as predicting other agents' strategies (strategy-proof mechanisms), contingent reasoning (obviously strategy-proof mechanisms), or foresight (strongly obviously strategy-proof mechanisms). We examine whether it is optimal for the mechanism designer who faces strategically unsophisticated agents to offer a mechanism from the corresponding class of simple mechanisms. We show that when the designer uses a mechanism that is not simple, while she loses the ability to predict play, she may nevertheless be better off no matter how agents resolve their strategic confusion.
 
  • "Correlation-Robust Auction Design," (with Wei He). NEW!​​​
    • Also see an earlier version Correlation that contains additional results such as the rate of the convergence result.
    • Abstract: We study the design of auctions with limited statistical information about the joint distribution of the bidders' valuations. In particular, we consider an auctioneer who has an estimate of the marginal distribution of a generic bidder's valuation but does not have reliable information about the correlation structure. We analyze the performance of mechanisms in terms of revenue guarantee, that is, the greatest lower bound of revenue across all joint distributions that are consistent with the marginals. We show that a simple auction format, the second-price auction with no reserve price, is asymptotically optimal. Furthermore, for any finite number of bidders, we solve for the robustly optimal reserve price that generates the highest revenue guarantee among second-price auctions with reserve prices.​
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Revealed Preference Analysis    
  • "A Theory of Revealed Indirect Preference," (with Gaoji Hu, John Quah, and Rui Tang).​ NEW!​​
    • Abstract: A preference over menus is said to be an indirect preference if it is induced by a preference over the objects that make up those menus, i.e., a menu A is ranked over B whenever A contains an object that is preferred to every object in B.  The basic question we address in this paper is the following: suppose an observer has partial information of an agent's ranking over certain menus; what necessary and sufficient conditions on those rankings guarantee the existence of a preference over objects that induces the observed menu rankings? Our basic result has a wide variety of applications.
                            (1) It gives a characterization of rankings over prices that could be extended to a bona fide indirect utility function.
                            (2) It leads to a generalization of Afriat's (1967) Theorem that allows for imperfectly observed choices.
                            (3) It could be used to characterize observations that are consistent with a multiple preferences model.
                            (4) It leads to a characterization of a model of choice generated by minimax regret. 
     
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Epistemic Game Theory ​