Jacob K. Goeree

We introduce a definition of multivariate majorization that is new to the economics literature. Our majorization technique allows us to generalize Mussa and Rosen's (1978) "ironing" to a broad class of multivariate principal-agents problems. Specifically, we consider adverse selection problems in which agents' types are one dimensional but informational externalities create a multidimensional ironing problem. Our majorization technique applies to discrete and continuous type spaces alike and we demonstrate its usefulness for contract theory and mechanism design. We further show that multivariate majorization yields a natural extension of second-order stochastic dominance to multiple dimensions and derive its implications for decision making under multivariate risk.

We introduce a set-valued solution concept, M equilibrium, to capture empirical regularities from over half a century of game theory experiments. We show M equilibrium serves as a meta theory for various models that hitherto were considered unrelated. M equilibrium is empirically robust and, despite being set-valued, falsifiable. Results from a series of experiments that compare M equilibrium to leading behavioral game theory models demonstrate its virtues in predicting observed choices and stated beliefs. Data from experimental games with a unique pure-strategy Nash equilibrium and multiple M equilibria exhibit coordination problems that could not be anticipated through the lens of existing models.

The authors describe their implementation of a market-based approach to reallocating fishing shares in New South Wales, Australia. Their solution addressed several nonstandard requirements, including the possibility of all-or-nothing offers, fair prices, and an endogenously determined subsidy.

Handbook of Spectrum Auction Design - edited by Martin Bichler October 2017

Handbook of Spectrum Auction Design - edited by Martin Bichler October 2017

Handbook of Spectrum Auction Design - edited by Martin Bichler October 2017

Handbook of Spectrum Auction Design - edited by Martin Bichler October 2017

Handbook of Spectrum Auction Design - edited by Martin Bichler October 2017