Papers

Climate policy changes production costs and can reshape the geography of production. We study this spatial channel in a focused model where mobile industrial activity responds to local attractiveness, agglomeration strengthens attractiveness, and carbon policy lowers the profitability of emissions-intensive locations. The model yields an explicit carbon-policy threshold separating spatial instability from stability. When emissions intensity rises with local industrial density, spatial concentration raises aggregate emissions even with unchanged total industrial activity. Embedding these dynamics in a two-jurisdiction policy game creates a wedge between regional and collective incentives: each government values the industrial activity located within its own territory, while aggregate welfare internalizes the effect of policy on economy-wide concentration. With transferable utility, cooperation can select a policy on the stable side of the threshold while the non-cooperative policy lies on the unstable side. A numerical exercise illustrates this regime change. European regional evidence, based on industrial emissions and gross value added at NUTS2 level, documents a positive emissions-activity association and identifies the empirical quantities needed to measure relocation and concentration effects. The analysis links climate cooperation to the spatial organization of production and establishes a benchmark for policy-induced industrial relocation.

The Guaranteed Utility Mechanism (GUM) was introduced to implement efficiency in Guaranteed Utility Equilibrium (GUE) in dynamic social choice problems. We show that this mechanism also has a previously unknown connection to risk minimization. Fixing an efficient decision policy, we study variance-minimizing budget-balanced transfer rules in the class of GUE-implementations of truthful reporting. A symmetrized version of GUM (sym-GUM) minimizes the sum of the agents' utility variances under truthful reporting when there is no public state. When a public state is present, a slight modification of this rule yields the minimizer for the same objective. Sym-GUM, however, does not minimize transfer risk. The minimizer for that problem is instead the symmetrized version of a closely related GUM-like transfer rule. In both problems, the minimizing truthful total transfers are unique up to agent-specific constants summing to zero and events of probability zero.

When voters evaluate alternatives sequentially, an anchoring bias makes their ballots depend on the order in which alternatives are presented. For approval ballots, no non-constant voting rule is robust to this dependence. We show that ranked ballots change the picture sharply: a rank-based rule is robust to the presentation order if and only if it is tops-only. Robustness to anchoring is thus available, but only at the price of ignoring everything a voter reports beyond her favourite alternative.

A planner wants to elicit partial information about a subject's preference relation. Preferences are grouped into “types" relevant to the planner's purpose. Can the planner identify the subject's type through menu-choice data or experiment, without distinguishing preferences within the same type? We provide a complete answer by characterizing identifiable type spaces. The characterization uses a novel geometric condition, called face consistency, which governs distinctions within and across square and hexagonal faces of the permutohedron. For every identifiable type space, we explicitly construct the unique irreducible identifying experiment from its boundary. This experiment is optimal among all identifying experiments under any cost criterion for which adding menus cannot reduce cost. Using the equivalence between identifiability and elicitation with acts, as shown in Azrieli et al. (2021), we study symmetric policies requesting unranked shortlists that contain only acceptable products, include every product preferred to a selected one, and are nonempty whenever an acceptable product exists. Only two such policies are elicitable with acts: requesting the favorite acceptable product or the entire acceptable set.

We take a revealed-preference approach to study the welfare effects of price discrimination. An analyst observes price and quantity data before and after a monopolist segments the market. The analyst knows neither the aggregate demand curve nor the information available to the monopolist. We characterize the set of observable price-quantity pairs that are rationalizable by some market segmentation. We then obtain sharp bounds on the change in consumer surplus arising from some segmentation. Finally, we provide conditions under which the data identifies an unambiguous increase (decrease) in consumer surplus.

Centralized admissions platforms grant priority based on self-reported facts such as residence, sibling status, or family income, and a false claim can cost another applicant her seat. Verifying every claim before matching is expensive, yet checking only admitted applicants afterward is unsafe: a false claim by an applicant who ends up unmatched may already have triggered a chain of rejections. We show how a platform can check far fewer claims without changing any outcome. A claim matters only if it can move its applicant across a school's admission cutoff, and we give an exact, easily computed test for when this happens. Checking only such claims, and only when they could change a school's tentative choice, reproduces every application, rejection, and assignment of deferred acceptance under full verification. When claims are truthful, checking the highest claimed priority first minimizes checks among such policies at each school decision, and the number of checks never exceeds the school's capacity. Truthful reporting of preferences and eligibility is a weakly dominant strategy, so incentives deliver the conditions under which this audit order is optimal. In simulated markets, the policy cuts verification by 76 percent relative to checking every claim upfront and by 36 percent relative to checking each claim when it first reaches a school. The design principle is to verify decisions, not files.

Weighted Shapley values represent asymmetry through positive weights and ordered priority classes. We give these parameters a preference interpretation in Roth's framework of lotteries over positions in transferable-utility games. Under common calibration, nullity, ordinary risk neutrality, unanimity efficiency, and unanimity positivity, position values in unanimity games are probability equivalents. Luce conditioning of these probabilities characterizes the Kalai-Samet family and is equivalent to partnership consistency. We separate conditioning into transitivity of revealed priority, pairwise determination of support, and invariance of positive odds. Two-player observations admit a weighted Shapley extension exactly when revealed priority is transitive and within-class odds satisfy a product rule. The extension is unique: pairwise comparisons identify the priority classes and weight ratios within each class. Larger unanimity games provide additional restrictions on supports and shares. We give constructive proofs, establish independence of the five axioms, and explain the scope and limits of the elicitation interpretation.

It is known that completeness of the coalitional ($C$-)desirability relation in a simple game does not imply the existence of a weighted-majority representation. We show that weightedness is implied in an approximate sense. Call an $n$-player simple game $\varepsilon$-weighted if, for some weight vector in the $(n-1)$-simplex, any losing coalition weight exceeds any winning coalition weight by at most $\varepsilon$; let $\varepsilon^{\ast}$ be the smallest such $\varepsilon$. We establish an upper bound on $\varepsilon^{\ast}$ in a general $C$-complete game, and deduce that, if all classes of equally desirable players become large asymptotically but the number of classes is bounded, then $\varepsilon^{\ast}=O(1/n_{\min})$ for the minimal player class size $n_{\min}$, and the bound is tight. Importantly, the minimal attainable fraction $\delta$ of coalitions mislabeled by a weighting rule also tends to $0$ when $n_{\min}\rightarrow\infty$ and the number of player classes is bounded, with $\delta=O(1/\sqrt{n_{\min}})$.

We show that distinct pure-strategy Nash equilibria typically have different utilitarian welfare values in sufficiently rich classes of $C^2$ games with open strategy sets. Here, typical means both generic and finitely prevalent, while rich means that the class admits a finite-dimensional family of perturbations that can independently move payoff values and first derivatives in any direction at any two distinct strategy profiles (for example, polynomial perturbations of degree at most three). Consequently, a welfare-maximizing equilibrium, if one exists, is unique. The result extends to each fixed $C^1$ payoff aggregator whose derivative with respect to the payoff vector is everywhere nonzero. In the full $C^2$ utility space, we also treat scalar criteria depending on strategies, payoffs, and payoff derivatives, subject to a nonvanishing condition in payoff-level or cross-player derivative directions. Finally, adjoining arbitrarily small perturbations from a suitable finite-dimensional space makes welfare separation typical in the augmented family, with separation holding for almost every perturbation of each fixed base game.

When a subset of alternatives is allowed to be the collective choice, one approach is to study the social choice correspondence defined on agents' preferences over alternatives. This paper considers a different approach. We argue that agents should have preferences directly over outcomes. We consider the social choice problem on a closed real interval, and assume a single-peaked domain over intervals. Our focus is on the peak-only social choice function, referred to as the voting scheme. The leftright scheme, which generalizes the minmax scheme, is the only strategy-proof voting scheme. Adding anonymity, it reduces to the generalized median scheme. For an odd number of agents, the median scheme is the only voting scheme satisfying efficiency, anonymity, and strategy-proofness.

We study object reallocation problems with single-peaked preferences. On the unrestricted domain of strict preferences, top trading cycles (TTC) is the unique rule that satisfies efficiency, individual rationality, and strategy-proofness. On the single-peaked preference domain, the crawler introduced by Bade (2019) satisfies the same properties. We show that the Nash equilibrium allocations of the crawler's direct revelation game form a complete lattice under weak Pareto dominance. The truthful allocation is the greatest element of this lattice, while the initial endowment allocation is its least element.

We study reward design for delegated representatives who acquire costly information and vote on a binary governance proposal. Effort improves both private information and delegated voting weight. We show that no payment rule can make sincere voting strictly optimal at every positive effort profile under a non-neutral prior, while fixed budgets limit accuracy in large symmetric committees. We then compare proportional sharing with a conditional rule that rewards only members of a sufficiently large winning coalition. Unlike proportional sharing, which supports sincere voting only through indifference, the conditional rule makes sincere voting strictly optimal at symmetric positive effort profiles. It supports sincere equilibria with the same effort as proportional sharing and, under suitable reward-cost conditions, with strictly higher effort and decision accuracy. Insincere equilibria may nevertheless coexist.

We study monopoly regulation when capacity is contractible but subsequent output is not. A firm privately observes its production cost before installing costly capacity and then choosing output, while the regulator cannot use transfers. We provide sufficient conditions under which a single capacity floor implements an optimal mechanism with full participation. The floor raises output by changing investment while leaving utilization to the firm after installation costs are sunk. Under additional conditions, the allocation has three regions: laissez-faire, full utilization of the floor, and underutilization. High-cost types knowingly install capacity they will not fully use, yet produce more than under laissez-faire. This physical waste is a necessary evil of optimal regulation that expands service. We also show that underutilization can persist in optimal regulation with capacity-contingent subsidies or a common entry fee.

This paper investigates the non-emptiness of the fuzzy core and introduces the notion of the TU-fuzzy core for pure exchange economies with discontinuous utility functions. We propose two stability conditions: local fuzzy-coalition stability and local TU-fuzzy-coalition stability. We also introduce an independent-$\pi$-balanced family of subsets of the agent set to construct two payoff-dependent NTU games. These constructions serve as bridges linking the fuzzy core, the TU-fuzzy core, and NTU games. Under the proposed stability conditions, we establish the non-emptiness of the fuzzy core for economies with quasi-concave utility functions and the non-emptiness of the TU-fuzzy core for economies with concave utility functions.

We consider a model of collective choice where for each menu there is an agent who is accountable for the choice made. Specifically, we assume that two agents (individuals or selves) allocate choice tasks over different menus using an ownership rule: the owner of the decision over a menu picks what maximizes his own preference and is accountable for it. We characterize three distinct ownership rules under different (nested) choice environments.

When does automation become an economically self-sustaining process? We define automation breakaway as the condition under which saving generated by physical capital and artificial labour is sufficient to finance continued automation. Artificial labour is labour-like in production but capital-like in accumulation, creating an income base that can support further investment. We characterise breakaway and its dynamic viability, showing that productivity and factor-income composition provide distinct financing channels. Artificial-labour accumulation strengthens the saving base supporting breakaway, while its effect on labour income changes sign with substitutability with human labour. Near full automation, aggregate labour income can contract through fewer human-filled jobs while average labour income in surviving jobs remains positive or rises. Optimal reliance on worker finance can begin to decline while it still provides a positive current net benefit.

A single auction can have both a shill-proof equilibrium and a non-shill-proof equilibrium in the model of Komo, Kominers, and Roughgarden. We give an explicit single item example with three bidder positions, publicly observed actions, positive winning prices, and a strictly regular i.i.d.\ value distribution. Real bidders have strict incentives in both equilibria. An initial public action conveys information about whether the final position is real. The resulting belief changes the middle bidder's response and reverses the first shill's strict preference between two actions. We verify both equilibria and compute their expected revenues.

When auction bidders misperceive their rivals, a seller can change not only the amount of information rent but also the states in which it is delivered. We ask when this payment-design opportunity survives a finite bidding interface, nonnegative-payment restrictions, and comparison with conventional auctions under the same beliefs. We formulate payment design as a linear program in nonnegative bidder rents. A single state can safely carry a report's rent when it is both cheapest for its intended type and least attractive to potential mimics. We characterize this alignment, bound the cost of a restricted payment architecture when alignment is imperfect, and use shadow prices when the rankings conflict. Own-type projection yields a unique optimal expected-payment rule for a fixed allocation. Contiguous bid bands implement truthful reporting at every value, but create pooling losses and within-band surplus. Under a separate smooth-belief model, feasible truthful rules and revenue upper bounds support comparisons with a first-price equilibrium under the same beliefs. A calibration using 1,000 eBay proof-set auction records illustrates a partition-dependent reversal: first price dominates all exactly truthful, no-subsidy rules on ten equal-probability bands in one scenario, while a richer contingent rule on ten equal-dollar bands outperforms it. An operator should choose interface resolution, payment dependence, and integrity tolerances jointly. Validate the probabilities that support incentives, compare formats under the same beliefs, and distinguish redesign from deployment. Any receipt advantage must cover implementation costs before it can imply a profit advantage.

We study the existence of real-valued social welfare functions (SWFs) on the set of infinite utility streams that satisfy anonymity and almost weak Pareto. We characterize the domains of one-period utilities, \(Y\subset \mathbb{R}\), for which such SWFs exist. We show that an SWF satisfying these two axioms exists if and only if \(Y\) contains no subset that is order-isomorphic to the set of negative and positive integers. Thus, the restrictions on \(Y\) required for the existence of an SWF satisfying anonymity and almost weak Pareto coincide with those required for an SWF satisfying anonymity and weak Pareto. Moreover, the SWF we construct is invariant under arbitrary permutations and satisfies stationarity, two properties that are particularly useful for decision making in infinite-horizon economies.

Generative AI enables authors to produce more manuscripts at lower cost. But evaluation by expert editors and referees remains scarce. In this context, the value of an author's submission rights can increase. Major research repositories and journals are reacting by imposing submission quotas and fees. Non-transferable author quotas transform submission of a manuscript into a revealed-priority decision. Authors construct a portfolio of their highest-ranked manuscripts. A common fee charges an author for every manuscript they submit. Both methods have drawbacks. Quotas do not flexibly allocate scarce review capacity to authors who have unusually strong realised candidate sets. Fees can generate heterogeneous submission thresholds that may be systematically related to an author's baseline portfolio quality. In this paper, I derive the condition under which submission quotas yield weakly higher mean reviewed value than fees, given an equal expected review load. When project values are bounded and candidate manuscripts are abundant, an equal-load fee can price out some authors entirely.

We study Balbuzanov and Kotowski's (2019) exclusion core for object allocation problems with complex endowments. We focus on mixed-ownership object allocation problems in which each object is either individually owned by one agent or publicly owned by all agents. Given a priority order over agents, an endowment structure, an initial allocation, and agents' preferences, we construct serial top trading cycles (STTC) graphs and define the associated STTC algorithm. The algorithm is the central tool for our analysis of exclusion-core-stable allocations. First, we show that, among domains defined by restrictions on endowment structures, the mixed-ownership domain is the largest on which the STTC algorithms characterize the exclusion core. Second, we provide a simple test for exclusion core stability: an allocation is exclusion core stable if and only if it is a fixed point of the STTC algorithm initialized at that allocation, independently of the priority order. Third, we show that the exclusion core is a von Neumann–Morgenstern (1944) stable set with respect to exclusion-domination. Finally, we study a dynamic exclusion-blocking process and show that, from any allocation, there exists a self-contained exclusion-blocking path to the exclusion core.

We derive sufficient conditions for the existence, non-existence, uniqueness and global attractivity of stochastic recursive utilities. Our approach uses abstract order-theoretic fixed-point arguments, allowing us to accommodate a large class of Markov consumption-growth models with unbounded per-period consumption and a broad range of recursive preferences, including non-expected utility specifications. We illustrate the usefulness of the framework through macro-finance applications to widely used consumption-growth models under several preference specifications, including Epstein–Zin preferences, multiple priors, smooth ambiguity, and Hansen–Sargent robust-control preferences. In each application, our general conditions reduce to a simple, economically interpretable parameter test that shows how fundamental parameters influence existence and uniqueness. While uniqueness of recursive utility can be difficult to guarantee in unbounded environments, in a Markov setting with non-unit elasticity we establish uniqueness within the class of recursive utilities having a so-called separability property.

We study mechanisms in which agents' preferences depend both on an object allocation and on a third party's beliefs about private information. A mechanism determines an allocation, transfers, and sends signals to the aftermarket. We compare two informational environments: (i) private transfers, where the aftermarket observes allocations and signals, and (ii) public transfers, where transfers are publicly observable. Our main result shows that any equilibrium outcome implementable with hidden transfers can be approximated arbitrarily well with public transfers. Thus, transfer observability generates at most a vanishing informational distortion and helps rationalize the common assumption that transfers remain hidden from aftermarkets.

For some integer $\ell\geq 2$, consider $m=2\ell-1$ voters, each of which has a preference ranking over $n$ alternatives. The Smith set is the smallest nonempty set of alternatives each of which defeats every alternative outside the set in a pairwise majority comparison. Under the standard benchmark impartial culture where each voter uniformly and independently chooses a random preference ranking over all alternatives, we study the asymptotic probability that the Smith set has cardinality $s$ for fixed $\ell$ and $n\to \infty$. First, we prove that the probability that the Smith set has constant cardinality $s$ goes to zero at a rate of $\Theta_{\ell,s} (n^{-s(\ell-1)/\ell})$. Next, if $\min\{s,n-s\}\to\infty$, we show that this probability decays superpolynomially. Further, when $s$ and $n-s$ are both $\Theta(n)$, we prove that the probability decays exponentially and determine the exact exponential base. Finally, we prove that the probability that the Smith set contains all alternatives approaches one at a rate of $\Theta_\ell(n^{-(\ell-1)/\ell})$. These theorems resolve the conjectures in [Liu et al, Ann Stat 2026] under impartial culture.

The article reviews the robust design and analysis of auctions, focusing on the predominant paradigm in the computer science literature, which quantifies robustness by the worst-case, over environments, ratio between the robust auction's performance and that of an optimal auction for the environment. Applications include robust analysis of canonical auctions such as the first-price auction for the welfare objective, prior-robust auction design for the revenue objective, and prior-robust design of exchange mechanisms for the gains-from-trade objective. Finally, the revelation principle is not without loss in robust mechanism design. The potential loss can be quantified by the revelation gap, the fraction of the optimal robust guarantee that is lost when restricting from all mechanisms to revelation mechanisms.

We study an attribute-based model of stochastic choice in which attention to each attribute is limited, and characterize two choice rules within it. The Multiplicative Attention Rule (MAR) rewards an alternative only for the attributes on which it ranks first, combining attention to these multiplicatively across attributes; it captures choice deferral driven by the cognitive load of attending to `too many' attributes. The Additive Attention Rule (AAR) instead averages attention across attributes and credits an alternative by its full ordinal rank within the menu. This difference in aggregation is what separates the two rules behaviourally: AAR reproduces the Attraction Effect while holding the relevant attributes fixed across menus, something MAR can do only when the attribute set itself changes, though AAR, in turn, cannot accommodate the Compromise Effect. Both rules are characterized by axioms on observable choice data, and in both cases the underlying attention parameters and attribute-based preferences are uniquely identified from that data.

We study the measure of restrictiveness proposed in Fudenberg, Gao, and Liang (2026) to evaluate complexity of economic models using synthetic data. We show that Rademacher complexity is an affine transformation of a particular case of a consistent finite-sample estimate of restrictiveness. Our results show that restrictiveness inherits a cardinal interpretation as a bound on generalization error while avoiding the inability of limiting Rademacher complexity to distinguish between some falsifiable models.

Many school choice mechanisms give students higher priority at schools they rank highly and aim to reward students' eagerness. This paper studies whether a centralized mechanism can incorporate such rank-dependent priorities while preserving truthful reporting. I consider a mechanism that jointly specifies how reported preferences modify schools' original priorities and how assignments are determined based on the modified priorities. I require the modification rule to satisfy rank monotonicity and the resulting matching to be stable with respect to the modified priorities. These two requirements jointly capture the policy objective of rewarding eagerness. My main result shows that any mechanism satisfying these requirements as well as strategy-proofness is outcome equivalent to the student-proposing Deferred Acceptance mechanism using the original priorities. Thus, if eagerness affects the outcome while the rank-dependent policy goal is maintained, the mechanism must be manipulable.

In a recent study, Ekici and Yenmez (2026) characterize top trading cycles (TTC) on the unrestricted domain by strategy-proofness, individual rationality, and pair rationality, uncovering a correspondence between the axiomatic foundations of TTC and deferred acceptance, matching theory's two canonical rules. We show that their characterization fails on the single-peaked domain, but it holds on the single-dipped domain even without strategy-proofness. They also show that pair rationality can be replaced in their characterization by two weaker conditions concerning agents' first and second choices. In contrast, this replacement fails on the single-dipped domain, even when strategy-proofness is imposed.

An advisor knows who would benefit from using a resource but cannot assign its use. Individuals have private assessments and may ignore advice. We study how their choices can respect a fixed usage limit. In our model, whenever coordination is possible, eliciting private assessments makes some harmful use unavoidable. Policies that maximize welfare, or even minimize harm, also forgo beneficial uses that direct assignment would permit. In those environments, observing assessments instead allows advice to achieve as much beneficial use as direct assignment, without harmful use. The loss therefore reflects the incentive cost of eliciting private beliefs while leaving use voluntary.