2011 Conference Keynote Speakers

Vincent Crawford - Biography

"Efficient Mechanisms for Level-k Bilateral Trading"

Abstract: This paper explores an aspect of behavioral mechanism design regarding nonequilibrium strategic thinking in initial responses to games. I reconsider Myerson and Satterthwaite’s (1983 JET) classic analysis of bilateral bargaining with asymmetric information, relaxing their equilibrium assumption in favor of a “level-k” model that has strong support in experiments. The level-k model makes it impractical to use the revelation principle to analyze all possible mechanisms, but restricting attention to direct mechanisms allows some progress. Myerson and Satterthwaite’s demonstration that with uniform value distributions Chatterjee and Samuelson’s (1983 Operations Research) symmetric double auction is ex ante incentive-efficient, extends to direct mechanisms for one leading class of level-k models. But for an alternative class, mechanisms with reserve prices can utilize “menu effects” to improve upon the CS double auction. I also characterize mechanisms that are level-k-incentive-efficient in the class of direct mechanisms for nonuniform value distributions, where such mechanisms no longer coincide with equilibrium-incentive-efficient direct mechanisms. I conclude with some observations about nonequilibrium mechanism design.

Rosa Matzkin - Biography

"On the structure of nonseparable models"

Jean Tirole - Biography

"Market Power Screens Willingness-to-Pay"

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