Matching Items (5)
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- All Subjects: decision-making
- All Subjects: Mechanism Design
- All Subjects: Stochastic dominance
- Creators: Schlee, Edward
- Creators: Kwan, Virginia
Description
This dissertation presents three essays in economics. Firstly, I study the problem of allocating an indivisible good between two agents under incomplete information. I provide a characterization of mechanisms that maximize the sum of the expected utilities of the agents among all feasible strategy-proof mechanisms: Any optimal mechanism must be a convex combination of two fixed price mechanisms and two option mechanisms. Secondly, I study the problem of allocating a non-excludable public good between two agents under incomplete information. An equal-cost sharing mechanism which maximizes the sum of the expected utilities of the agents among all feasible strategy-proof mechanisms is proved to be optimal. Under the equal-cost sharing mechanism, when the built cost is low, the public good is provided whenever one of the agents is willing to fund it at half cost; when the cost is high, the public good is provided only if both agents are willing to fund it. Thirdly, I analyze the problem of matching two heterogeneous populations. If the payoff from a match exhibits complementarities, it is well known that absent any friction positive assortative matching is optimal. Coarse matching refers to a situation in which the populations into a finite number of classes, then randomly matched within these classes. The focus of this essay is the performance of coarse matching schemes with a finite number of classes. The main results of this essay are the following ones. First, assuming a multiplicative match payoff function, I derive a lower bound on the performance of n-class coarse matching under mild conditions on the distributions of agents' characteristics. Second, I prove that this result generalizes to a large class of match payoff functions. Third, I show that these results are applicable to a broad class of applications, including a monopoly pricing problem with incomplete information, as well as to a cost-sharing problem with incomplete information. In these problems, standard models predict that optimal contracts sort types completely. The third result implies that a monopolist can capture a large fraction of the second-best profits by offering pooling contracts with a small number of qualities.
ContributorsShao, Ran (Author) / Manelli, Alejandro (Thesis advisor) / Chade, Hector (Thesis advisor) / Schlee, Edward (Committee member) / Kovrijnykh, Natalia (Committee member) / Arizona State University (Publisher)
Created2011
Description
The purpose of this thesis study was to examine whether the "war on cancer" metaphor influences cancer perception and treatment decision. A total of 249 undergraduates (152 females) from a large southwestern university participated in an online survey experiment and were either randomly assigned to the control condition (N=123) or to the war prime condition (N=126). Participants in the control condition did not receive the metaphor manipulation while participants in the war prime condition received the subtle "war on cancer" metaphor prime. After the prime was given, participants read a scenario, answered questions related to the situation, and responded to demographic questions. The results suggested that, compared to participants in the no-prime condition, participants exposed to the war metaphor were more likely to (a) view melanoma as an acute disease, (b) choose chemotherapy over molecular tests, and (c) prefer more aggressive treatment. These findings illustrated the unintended consequences of the "war on cancer" slogan. The results were encouraging and in the predicted direction, but the effect size was small. The discussion section described possible future directions for research.
ContributorsShangraw, Ann Mariah (Author) / Kwan, Virginia (Thesis director) / Neuberg, Steven (Committee member) / Cavanaugh Toft, Carolyn (Committee member) / Barrett, The Honors College (Contributor) / Department of Psychology (Contributor)
Created2015-05
Description
Prior research on consumer behavior in health insurance markets has primarily focused on individual decision making while relying on strong parametric assumptions about preferences. The aim of this dissertation is to improve the traditional approach in both dimensions. First, I consider the importance of joint decision-making in individual insurance markets by studying how married couples coordinate their choices in these markets. Second, I investigate the robustness of prior studies by developing a non-parametric method to assess decision-making in health insurance markets. To study how married couples make choices in individual insurance markets I estimate a stochastic choice model of household demand that takes into account spouses' risk aversion, spouses' expenditure risk, risk sharing, and switching costs. I use the model estimates to study how coordination within couples and interaction between couples and singles affects the way that markets adjust to policies designed to nudge consumers toward choosing higher value plans, particularly with respect to adverse selection.
Finally, to assess consumer decision-making beyond standard parametric assumptions about preferences, I use second--order stochastic dominance rankings. Moreover, I show how to extend this method to construct bounds on the welfare implications of choosing dominated plans.
Finally, to assess consumer decision-making beyond standard parametric assumptions about preferences, I use second--order stochastic dominance rankings. Moreover, I show how to extend this method to construct bounds on the welfare implications of choosing dominated plans.
ContributorsSanguinetti, Tomas (Author) / Kuminoff, Nicolai V. (Thesis advisor) / Schlee, Edward (Committee member) / Ketcham, Jonathan (Committee member) / Silverman, Daniel (Committee member) / Arizona State University (Publisher)
Created2020
Description
I study split-pie bargaining problems between two agents. In chapter two, the types of both agents determine the value of outside options -- I refer to these as interdependent outside options. Since a direct mechanism stipulates outcomes as functions of agents' types, a player can update beliefs about another player’s type upon receiving a recommended outcome. I term this phenomenon as information leakage. I discuss binding arbitration, where players must stay with a recommended outcome, and non-binding arbitration, where players are not obliged to stay with an allocation. The total pie is reduced if the outcome is an outside option. With respect to efficiency, I derive a necessary and sufficient condition for first best mechanisms. These are mechanisms that assign zero probability to outside options for every report received. The condition describes balanced forces in conflict (outside options) and is the same in the cases of binding and non-binding arbitration. I also show a strong link between conflict and information: when conflict exists, information leakage occurs. Hence, non-binding arbitration may seem more restrictive than binding arbitration. To analyze why this is the case, I solve for second best mechanisms with binding arbitration and find a condition under which they can be implemented under non-binding arbitration. Thus, I show that non-binding arbitration can be as effective as binding arbitration in terms of efficiency. I also examine whether the equivalence between binding and non-binding arbitration can cease to hold, and provide analysis of why this happens. In chapter three, the bargaining problem entails no uncertainty but rather envy. Players can feel envy about the allocation of the other player. The Nash Bargaining solution is obtained in this context and some comparative statics are shown. The introduction of envy makes the more envious party a tougher negotiator.
ContributorsGonzalez Sanchez, Eric Patricio (Author) / Manelli, Alejandro (Thesis advisor) / Chade, Hector (Committee member) / Schlee, Edward (Committee member) / Arizona State University (Publisher)
Created2020
Description
Social proof and mismatch of self-preference have been assumed to play an important role in the inference of value. They can be influential factors when it comes to decision-making in a mate-selection environment. In this thesis study, participants took an online survey in the form of a dating website. They answered a series of questions about the traits they would like to see in a potential mate. They were then presented with four potential mates and asked to rank them by their preferences. The results show that participants most preferred the potential mate with a high social proof and a low mismatch of self-preference and least preferred the potential mate with a low social proof and a high mismatch of self-preference. When comparing just social proof and mismatch of self-preference, there was not an interaction effect between the two. I conclude that even though social proof is a powerful influencing factor by itself, it did not have the power to trump the mismatch of self-preference.
ContributorsAkhter, Sumbal (Author) / Kwan, Virginia (Thesis director) / Knight, George (Committee member) / Cohen, Adam (Committee member) / Barrett, The Honors College (Contributor) / College of Liberal Arts and Sciences (Contributor)
Created2012-12