Mechanism Design
Implementation with Uncertain Evidence (Joint with Yi-Chun Chen)
(Work in Progress, Job Market Paper)
We study the full implementation problem with hard evidence when the state is common knowledge but agents face uncertainty about the evidence endowments of other players. We identify a necessary and sufficient condition for implementation in Bayesian Nash equilibrium. The mechanism presented here is finite, fully implements in mixed strategies, and has no "questionable features" such as integer or modulo games. Off the equilibrium transfers are used. We also provide a mechanism which implements in rationalizable strategies with arbitrarily small transfers alongside.
Paper
Paper
Direct Implementation with Evidence (Joint with Yi-Chun Chen and Sun Yifei)
(Conditionally Accepted at Theoretical Economics)
We study full implementation with hard evidence in a bounded environment. By invoking monetary transfers off the equilibrium, we show that a social choice function is Nash implementable in a direct revelation mechanism if and only if it satisfies the measurability condition proposed by Ben-Porath and Lipman (2012). Building on a novel classification of lies according to their refutability with evidence, the mechanism requires only two agents, accounts for mixed-strategy equilibria, accommodates evidentiary costs, and can also be modified to account for limited solvency of the agents. We also establish a necessary and sufficient condition on the evidence structure for renegotiation-proof bilateral contracts, based on the classification of lies.
Paper
Paper
A Mechanism for Destabilizing Cartels
(Accepted at the 2023 Australasian Meeting of the Econometric Society)
Attention has recently been focused on the possibility of artificially intelligent sellers on platforms colluding to limit output and raise prices. Such arrangements (cartels), however, feature an incentive for individual sellers to deviate to a lower price (cheat) to increase their own profits. Stabilizing such cartels therefore requires credible threats of punishments, such as price wars. In this paper, I propose a mechanism to destabilize cartels by protecting any cheaters from a price war by guaranteeing a stream of profits which is unaffected by arbitrary punishments, only if such punishments actually occur. Equilibrium analysis of the induced game predicts a reversion to repeated static Nash pricing. When implemented in a reinforcement learning framework, it provides substantial reductions in prices (reducing markups by 40% or more), without affecting product variety or requiring the platform to make any payments on path. This mechanism applies to both the sale of differentiated goods on platforms, and the sale of homogeneous goods through direct sales. The mechanism operates purely off-path, thereby inducing no welfare losses in practice, and does not depend on the choice of discount factors.
Paper
Paper
Bias Labels for Media Sources: An Implementation Theory Approach
(Work in Progress)
In a dynamic model where political polarization emerges naturally, I ask whether providing trustable bias labels for media sources helps to reduce polarization, potentially even reversing it. I show that accurate bias labels can be constructed using a labelling mechanism relying on uncertain evidence, where each media source reports other's biases and is disciplined using a novel alternative to monetary transfers. Under weak assumptions on agent behavior in such a model, labels reduce polarization and, in some cases, may even lead to a modest degree of depolarization.
Energy Economics
Transactive Energy Market Framework for Decentralized Coordination of Demand Side Management within a Cluster of Buildings (Joint with Chandra, R, Radhakrishnan K. K, and Panda S. K)
(Published in IEEE Transactions on Industry Applications)
Flexibility in electricity demand can be leveraged for demand side management (DSM) to enable aspects such as “demand following generation” and provide ancillary services to support grid integration of renewable and distributed energy resources. The upcoming connected devices in demand centers such as commercial buildings and households may be leveraged for this. However, the coordination among distributed demand centers in a scalable decentralized manner to achieve DSM objectives is still a challenge. In this article, a generalized hierarchical transactive energy based multiagent framework is proposed. This framework includes energy management demand agents (EMDAs) at the building level, which coordinate the operation of different appliances within the buildings. EMDAs also actively participate on day-ahead Walrasian market at the cluster of buildings level. In this market, the effect of wide-adoption of DSM on generation dispatch is also studied. A particular instance of this framework is also implemented in a cyber-test system consisting of standard industrial microcontroller platforms to emulate practical implementations via smart meters. Experimental results of the proposed system are included to demonstrate the possibility of avoiding disptach from expensive generation units by reduction in peak demand and providing demand response inherently.