Browsing by Author "Moulin, Herve"

Now showing 1 - 9 of 9
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    Essays in Cooperative Stability
    (2014-04-22) Dogan, Emre; Moulin, Herve; Bogomolnaia, Anna; Pasquali, Matteo
    We define a very general group manipulation idea and the corresponding stability concept of “absence-proofness”. In the first chapter, we analyze this concept in surplus sharing transferable utility games, exchange economies with private endowments and fair division problems. Solutions that are stable in our sense are core selections. We also show that it is weaker than population monotonicity in cooperative games and fair division problems, and very demanding for the allocation problems with private endowments. Particularly, the Walrasian allocation rule is not immune to manipulation. Also, it is the first external stability concept defined for fair division problems. In the second chapter, we work on cooperative stability in cost sharing of a minimum cost spanning tree and give a family of stable solutions that are responsive to the asymmetries in the cost data. Interpreting population monotonicity as a strong stability property, in the third chapter, we study population monotonicity in the fair division of indivisible goods where monetary compensations are allowed. We show that if there are more than three goods no efficient solution satisfies this property. For the two goods case we define hybrid solutions that are efficient and population monotonic.
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    Essays in intrafamily distribution and taxation
    (2004) Gugl, Elisabeth; Moulin, Herve
    This thesis consists of three essays. In the first two essays we assume that the wife earns a lower wage rate than the husband and we analyze intrafamily distributional effects if environmental parameters such as the tax system or divorce regulations change. The third essay evaluates the efficiency of a production tax when a public service is provided to business. The first essay considers a tax reform from individual to joint taxation for couples in a one-period model. An expansion of the utility possibility set due to tax reform makes both spouses better off, if spouses apply a bargaining rule with a disagreement point outside marriage. Alternatively, if spouses receive family resources proportional to their contribution to family full income, the husband prefers joint taxation and the wife prefers individual taxation. In the model of the second essay, spouses bargain in each of two periods over the resource allocation between them using divorce as the disagreement outcome. Since each spouse's first period labor supply influences his or her second period bargaining power, the couple's labor supply decisions are no longer efficient. (1) A reduction of the tax rate of the wife when divorced increases inefficiency within marriage, but raises the wife's intertemporal utility. (2) An equal split of income between former spouses equalizes utility shares between spouses and it is less distortionary than a divorce law granting each former spouse his or her stand alone income. (3) Whenever the wife benefits from a tax reform from joint towards individual taxation of the family, inequality between spouses decreases but the husband might be worse off. In the third essay, local governments finance a public service to firms either with a tax on capital, the mobile factor, or with a tax on production. We find that in the Zodrow-Mieszkowski model a production tax is inefficient except for the case of a Cobb-Douglas technology. Using a CES production function, we show that a production tax is more efficient than a capital tax in the Zodrow-Mieszkowski model.
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    Essays in Mechanism Design
    (2011) You, Jung Sook; Moulin, Herve
    This thesis addresses problems in the area of mechanism design. In many settings in winch collective decisions are made, individuals' actual preferences are not publicly observable. As a result, individuals should be relied on to reveal this information. We are interested in an important application of mechanism design, which is the construction of desirable procedures for deciding upon resource allocation or task assignment. We make two main contributions. First, we propose a new mechanism for allocating a divisible commodity between a number of buyers efficiently and fairly. Buyers are assumed to behave as price-anticipators rather than as price-takers. The proposed mechanism is as parsimonious as possible, in the sense that it requires participants to report a one-dimensional message (scalar strategy) instead of an entire utility function, as required by Vickrey-Clarke-Groves (VCG) mechanisms. We show that this mechanism yields efficient allocations in Nash equilibria and moreover, that these equilibria are envy-free. Additionally, we present distinct results that this mechanism is the only simple scalar strategy mechanism that both implements efficient Nash equilibria and satisfies the no envy axiom of fairness. The mechanism's Nash equilibria are proven to satisfy the fairness properties of both Ranking and Voluntary Participation. Our second contribution is to develop optimal VCG mechanisms in order to assign identical economic "bads" (for example, costly tasks) to agents. An optimal VCG mechanism minimizes the largest ratio of budget imbalance to efficient surplus over all cost profiles. The optimal non-deficit VCG mechanism achieves asymptotic budget balance, yet the non-deficit requirement is incompatible with reasonable welfare bounds. If we omit the non-deficit requirement, individual rationality greatly changes the behavior of surplus loss and deficit loss. Allowing a slight deficit, the optimal individually rational VCG mechanism becomes asymptotically budget balanced. Such a phenomenon cannot be found in the case of assigning economic "goods."
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    Essays in mechanism design and decision theory
    (2008) Ozsoy, Hatice; Moulin, Herve
    Many economic decisions rely on information that is privately owned by the agents, who may have incentives to misreport this information. The strategic possibilities of the agents may take different forms, depending on the economic environment. The first chapter studies the scheduling problem, and considers coalitional maneuvers in the form of splitting and transferring jobs. The second chapter explores strategic behavior in the form of merging by users in the minimum cost spanning tree problem. The third chapter is about decision making under uncertainty, where we give an alternative characterization of individual preferences that are based on beliefs.
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    Essays in strategic cost sharing
    (2008) Juarez, Ruben; Moulin, Herve
    A mechanism elicits the monetary valuations from the agents for getting a unit of good (or service), allocates some goods to some agents and charge some money only to the agents who are served. We study welfare and incentive compatibility properties of these mechanisms. We compare two familiar mechanisms in an economy with increasing marginal cost, random priority (RP) and average cost (AC). We find that RP unambiguously performs better than AC using the worst-absolute surplus loss measure. In similar economies, we characterize the mechanisms that, are immune to coordinated misreports of any group of agents and provide optimal mechanisms for different shapes of cost functions using the worst absolute surplus loss.
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    Essays on Fair Division and Social Choice
    (2013-12-04) Ertemel, Sinan; Moulin, Herve; Bogomolnaia, Anna; Stoll, Richard J.
    In my dissertation, I studied Social Choice and Fair Division problems under uncertainty. In the first chapter, I defined welfare egalitarianism in the form of certainty equivalence where the individuals are endowed with state contingent consumption bundles and provided an axiomatic characterization of this ordering by efficiency, equity and monotonicity axioms. In the second chapter, I defined two proportional rules on the rationing problem with state contingent claims and gave the characterization of those two rules by No Advantageous Reallocation. And in the last chapter, I consider a class of resolute social choice correspondences and characterize the strong Nash equilibrium outcomes of their voting games in terms of a generalization of the Condorcet principle.
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    Essays on strategyproofness in cooperative production
    (2005) Leroux, Justin Theodore; Moulin, Herve
    We study incentive compatible profit-sharing rules when output (or profit) is obtained via the joint use of a technology exhibiting decreasing marginal returns. The incentives compatibility criterion we adopt is that of strategy-proofness (SP), arguably the most robust and the most demanding incentives requirement. We first show that no strategy-proof mechanism is efficient. We then characterize the class of strategy-proof mechanisms in the two-agent case, and show that it is the union of the serial and reverse serial families of sharing rules. Moreover, SP and the requirement that no individual benefits from the presence of others (the familiar stand-alone test) characterize the class of rules known as fixed path methods (FPMs), which is a subset of the serial family. FPMs share marginal increments of input, and the corresponding increments of output, along a predetermined path. Finally, we consider a situation where a number of individuals form a partnership and contribute capital and labor to the enterprise. We propose a strategy-proof mechanism which improves upon autarky: the inverse marginal product proportions (IMPP) mechanism. At the margin, capital that would be left idle in autarky, but not under the efficient use of the total capital, is assigned to the agents with relatively low disutility of effort in proportion to the relative productivity of their own capital. The IMPP mechanism is effectively an FPM whose path is uniquely determined by the capital contributions of the partners. Thus, we establish a correspondence between the class of FPMs to manage a common property technology and the family of partnership problems. We discuss the appeal of the IMPP mechanism as an alternative to existing profit-sharing schemes in professional partnerships.
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    Secure implementation, network cost sharing and oligopolistic price discrimination
    (2010) Kumar, Rajnish; Moulin, Herve
    In chapter 1, we consider the possibility of Secure Implementation in Production Economies beyond the result provided in the Saijo et al. (2007) paper. We find a large class of SCFs to be securely implementable. The serial SCF and the widely studied Fixed Path SCFs which contains serial SCF as a special case are all special cases of our function. In chapter 2, which is a version of my work with Ruben Juarez, we consider the problem of sharing the cost of a network formed by choice of paths of agents to connect their demand nodes. Motivated by the inefficiency, instability and huge informational requirements of the widely used Shapley (Sh) cost sharing rules, we look for mechanisms in a setting of minimal informational requirement which overcome the said shortcoming. We characterize a class of such mechanisms under different notions of robust implementations. We also discover that voluntary participation is possible in this setup with no more inefficiency than that of Sh. In chapter 3, which is a version of my work with Levent Kutlu, we consider the aspect of price discrimination under oligopolistic setting. The environment has two stages of the game. In first stage the firms fight on the quantity they want to put in the market and then in the second stage they decide how to distribute that quantity among the buyers with different valuations. We characterize the unique NE of this game. The firms which ends up with higher quantity in the first stage sells to all the buyers whereas the smaller firm sells some of the high end buyers.
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    Three essays on fair division and decision making under uncertainty
    (2013-09-16) Xue, Jingyi; Moulin, Herve; Bogomolnaia, Anna; Grant, Simon; Semmes, Stephen; Xiong, Siyang
    The first chapter is based on a paper with Jin Li in fair division. It was recently discovered that on the domain of Leontief preferences, Hurwicz (1972)'s classic impossibility result does not hold; that is, one can find efficient, strategy-proof and individually rational rules to divide resources among agents. Here we consider the problem of dividing l divisible goods among n agents with the generalized Leontief preferences. We propose and characterize the class of generalized egalitarian rules which satisfy efficiency, group strategy-proofness, anonymity, resource monotonicity, population monotonicity, envy-freeness and consistency. On the Leontief domain, our rules generalize the egalitarian-equivalent rules with reference bundles. We also extend our rules to agent-specific and endowment-specific egalitarian rules. The former is a larger class of rules satisfying all the previous properties except anonymity and envy-freeness. The latter is a class of efficient, group strategy-proof, anonymous and individually rational rules when the resources are assumed to be privately owned. The second and third chapters are based on two working papers of mine in decision making under uncertainty. In the second chapter, I study the wealth effect under uncertainty --- how the wealth level impacts a decision maker's degree of uncertainty aversion. I axiomatize a class of preferences displaying decreasing absolute uncertainty aversion, which allows a decision maker to be more willing to take uncertainty-bearing behavior when he becomes wealthier. Three equivalent preference representations are obtained. The first is a variation on the constraint criterion of Hansen and Sargent (2001). The other two respectively generalize Gilboa and Schmeidler (1989)'s maxmin criterion and Maccheroni, Marinacci and Rustichini (2006)'s variational representation. This class, when restricted to preferences exhibiting constant absolute uncertainty aversion, is exactly Maccheroni, Marinacci and Rustichini (2006)'s ariational preferences. Thus, the results further enable us to establish relationships among the representations for several important classes within variational preferences. The three representations provide different decision rules to rationalize the same class of preferences. The three decision rules correspond to three ways which are proposed in the literature to identify a decision maker's perception about uncertainty and his attitude toward uncertainty. However, I give examples to show that these identifications conflict with each other. It means that there is much freedom in eliciting two unobservable and subjective factors, one's perception about and attitude toward uncertainty, from only his choice behavior. This exactly motivates the work in Chapter 3. In the third chapter, I introduce confidence orders in addition to preference orders. Axioms are imposed on both orders to reveal a decision maker's perception about uncertainty and to characterize the following decision rule. A decision maker evaluates an act based on his aspiration and his confidence in this aspiration. Each act corresponds to a trade-off line between the two criteria: The more he aspires, the less his confidence in achieving the aspiration level. The decision maker ranks an act by the optimal combination of aspiration and confidence on its trade-off line according to an aggregating preference of his over the two-criterion plane. The aggregating preference indicates his uncertainty attitude, while his perception about uncertainty is summarized by a generalized second-order belief over the prior space, and this belief is revealed by his confidence order.