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Aggregation of Monotonic Bernoullian Archimedean preferences: Arrovian impossibility results
http://hdl.handle.net/10419/97235
Title: Aggregation of Monotonic Bernoullian Archimedean preferences: Arrovian impossibility results
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<br/>Authors: Herzberg, Frederik
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<br/>Abstract: Cerreia-Vioglio, Ghirardato, Maccheroni, Marinacci and Siniscalchi (Economic Theory, 48:341-375, 2011) have recently proposed a very general axiomatisation of preferences in the presence of ambiguity, viz. Monotonic Bernoullian Archimedean (MBA) preference orderings. This paper investigates the problem of Arrovian aggregation of such preferences - and proves dictatorial impossibility results for both finite and infinite populations. Applications for the special case of aggregating expected-utility preferences are given. A novel proof methodology for special aggregation problems, based on model theory (in the sense of mathematical logic), is employed.Welfare improving discrimination based on cognitive limitations
http://hdl.handle.net/10419/97233
Title: Welfare improving discrimination based on cognitive limitations
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<br/>Authors: Sürücü, Oktay
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<br/>Abstract: This paper is concerned with the situation in which a profit-maximizing monopolist faces consumers that are diverse not only in their preferences but also in their levels of bounded rationality. The behavioral phenomenon considered here is the attraction effects when choices are made across categories. Using the standard second-degree price discrimination model, the optimal menu of contracts that screens consumers' types is characterized. The benefit of discriminating consumers based on their preference and cognitive limitation is always higher than its cost. In other words, the monopolist can exploit consumers and increase his profit with this contract. The model provides a possible explanation for the apparent puzzle why one may observe that the same quality products are priced differently under different labels. Moreover, this contract is welfare improving.Eliciting private information with noise: The case of randomized response
http://hdl.handle.net/10419/97234
Title: Eliciting private information with noise: The case of randomized response
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<br/>Authors: Blume, Andreas; Lai, Ernest K.; Lim, Wooyoung
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<br/>Abstract: The paper formalizes Warner's (1965) randomized response technique (RRT) as a game and implements it experimentally, thus linking game theoretic approaches to randomness in communication with survey practice in the field and a novel implementation in the lab. As predicted by our model and in line with Warner, the frequency of truthful responses is significantly higher with randomization than without. The model predicts that randomization weakly improves information elicitation, as measured in terms of mutual information, although, surprisingly, not always by RRT inducing truth-telling. Contrary to this prediction, randomization significantly reduces the elicited information in our experiment.Convex vNMstable sets for a semi-orthogonal game. Part III: A small economy - uniqueness and multiple solutions
http://hdl.handle.net/10419/97232
Title: Convex vNMstable sets for a semi-orthogonal game. Part III: A small economy - uniqueness and multiple solutions
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<br/>Authors: Rosenmüller, Joachim
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<br/>Abstract: This paper constitues the third part in a series dealing with vNM-Stable Sets, see [2], [3]. We consider (cooperative) linear production games with a continuum of players. The coalitional function is generated by r + 1 production factors (non atomic measures). r factors are given by orthogonal probabilities (cornered production factors) while factor r + 1 h is provided across the corners of the market. We consider convex vNM-Stable Sets of this game. Within this third part we exhaustively discuss the situation in a small but very significant economy or game. In tis situation, there are two corners of the market (factors represented by orthogonal probabilities), each of which being divided into two sectors of constant density of the non cornered commodity (a measure exhibiting mass across all corners of the market). For short, this is the 2 x 2-case, the foundations of which have been laid in Example 2.1 of Part I (cf. [2]. It turns out that, depending on the boundary conditions, we obtain two different scenarios. The first one reflects a situation that exhibits a unique vNM-Stable Set. The second scenario allows for a variety of vNM-Stable Sets including but not equal to the core of the game.