Research Page

My main research interests are in mechanism design theory and microeconomic theory. I have specifically found that experimental economics is a useful tool to improve my own beliefs and perceptions about this area of research.

Abstract-- We describe an experimental comparison of the out-of-equilibrium performance of three allocation mechanisms designed to achieve Lindahl outcomes as Nash equilibria: the mechanisms due to Walker (1981), Kim (1993), and Chen (2002). We find that Chen’s mechanism, which is supermodular, converges closest and most rapidly to its equilibrium. However, we find that the properties that move subjects toward equilibrium in Chen’s mechanism typically generate sizeable taxes and subsidies when not in equilibrium, and correspondingly large budget surpluses and deficits, which typically far outweigh the surplus created by providing the public good. The Kim mechanism, on the other hand, converges relatively close to its equilibrium and exhibits much better out-of-equilibrium efficiency properties.

Abstract-- This paper introduces a new incentive compatible mechanism which for general preference environments implements Lindahl allocations as Nash equilibria. This mechanism does not increase in structural complexity as consumers are added to the economy, the minimum dimension of data needed to compute payoffs is smaller than other mechanisms with comparable properties; and for quasi-linear environments, this mechanism induces a supermodular game for appropriate choices of the mechanism parameters. Thus, this new Lindahl mechanism provides a connection between the desirable welfare properties of Lindahl allocations and the desirable theoretical/ convergence properties of supermodular games.

Abstract -- Earlier experimental work on incentive compatible public good mechanisms has almost exclusively focused on the stability properties of these institutions, finding that institutions with strong stability properties were better at achieving their desired allocation. In this study we hold this insight constant and focus on another important issue in economic design. Specifically, we focus on the role of informational complexity in the design of economic institutions. An institution is more complex if it requires people to know more information when making their decisions. Some institutions become more complex as the economy grows in size. This study proposes to examine information complexity by comparing the performance of two stable efficient institutions that vary in the way their information requirement changes when the economy gets bigger.

Abstract -- We provide the appropriate generalization of Ausubel's 2004 ascending bid auction to environments where the goods are non-rival and non-excludable. Like its private good counterpart, we show that the public good Ausubel auction encourages truthful revelation of preferences, is privacy preserving, and yields an equilibrium allocation that is outcome equivalent to the public good Vickrey sealed-bid auction. We then generalize this auction to fit a broader set of public good environments.

Abstract-- When contracts are incomplete or unenforceable inefficient levels of investment may occur due to the possibility of hold-up. However, if individuals care about reciprocity it is possible to reduce the impact of hold-up when punishment for breach of contract is possible, even if punishment is not a part of any subgame perfect equilibrium. We provide a simple model of hold-up, apply reciprocity theory, and test the resulting predictions with an experiment. The results of the experiment support the theoretical prediction that a preference for reciprocity can improve efficiency and increase investment.

Abstract -- Our study explores the role of experience in mixed strategy games by comparing the play of novice (or inexperienced) online poker players to experienced players in a dynamic zero-sum poker game with a unique mixed strategy Nash equilibrium. We utilize an independent, player specific data set to verify the experience of these online poker players and to gain a more comprehensive view on the role of experience in mixed strategy play than has been used to date. While neither of these groups play according to Minimax, we do find that online poker players play significantly closer to the Minimax prediction than the non poker players in the first half of the experiment. In the second half of the experiment, however, we observe evidence of significant learning from the non-poker players which mitigates much of the aforementioned gap.

-- To play a demonstration version of our simplified poker game you can click here.