The communication requirements of social choice rules and supporting budget sets

Segal, Ilya

doi:10.1016/j.jet.2006.09.011

Cited by 56 publications

(49 citation statements)

References 44 publications

(80 reference statements)

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“…Second, our paper has not addressed another classical side of the markets versus governments debate of von Hayek-Lange, which concerns the efficiency of different resource allocation mechanisms in terms of their communication requirements. Segal (2007) provides a very promising direction of research on this topic. Finally, our notion of the markets in this paper is simplistic.…”

Section: Discussionmentioning

confidence: 99%

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Markets versus governments

Acemoğlu¹,

Golosov²,

Tsyvinski

2008

Journal of Monetary Economics

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We provide a simple framework for comparing market allocations with government-regulated allocations. Governments can collect information about individuals' types and enforce transfers across individuals. Markets (without significant government intervention) have to rely on transactions that are ex post beneficial for individuals. Consequently, governments achieve better risk sharing and consumption smoothing than markets. However, politicians in charge of collective decisions can use the centralized information and the enforcement power of government for their own benefits. This leads to political economy distortions and rents for politicians, making government-operated allocation mechanisms potentially worse than markets. We provide conditions under which it is ex ante beneficial for the society to tolerate the political economy distortions in exchange for the improvement in risk sharing. For example, more effective controls on politicians or higher discount factors of politicians make governments more attractive relative to markets. Moreover, when markets cannot engage in self-enforcing risk-sharing arrangements and income effects are limited, greater risk aversion and greater uncertainty make governments more attractive relative to markets. Nevertheless, we also show theoretically and numerically that the effect of risk aversion on the desirability of markets may be non-monotonic. In particular, when markets can support self-enforcing risk-sharing arrangements, a high degree of risk aversion improves the extent of risk sharing in markets and makes governments less necessary. The same pattern may also arise because of ''income effects'' on labor supply. Consequently, the welfare gains of governments relative to markets may have an inverse U-shape as a function of the degree of risk aversion of individuals. r

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Section: Discussionmentioning

confidence: 99%

“…1 See Segal (2007) for a recent model developing this insight. 2 See, for example, Albanesi and Sleet (2005), , Golosov et al (2003), Kocherlakota (2005), Werning (2002), and for applications of dynamic mechanism design approaches to risk-sharing and optimal taxation problems.…”

Section: Article In Pressmentioning

confidence: 99%

Markets versus governments

Acemoğlu¹,

Golosov²,

Tsyvinski

2008

Journal of Monetary Economics

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“…2 The problem of designing computationally feasible economic mechanisms is studied in the …eld of "Algorithmic Mechanism Design" (Nisan and Ronen (1999)). While economists have long been concerned about the computational properties of economic allocation mechanisms (e.g., see Hayek (1945)), the formal economic literature has focused on modeling communication costs (e.g., Hurwicz 1977, Mount and Reiter 1974, Segal 2007), which Our proposed solution is to use the class of "deferred-acceptance" (DA) auctions, which generalize the idea of the eponymous matching algorithms of Gale and Shapley (1962) and Kelso and Crawford (1982) and related clock auction designs, such as the simultaneous multiple-round auctions used for radio spectrum sales. These auctions are iterative processes in which the highest scoring (and hence least attractive) bids are rejected in each round and the bids left standing at the end are accepted.…”

Section: Introductionmentioning

confidence: 99%

Deferred-acceptance auctions and radio spectrum reallocation

Milgrom

Segal

2014

Proceedings of the Fifteenth ACM Conference on Economics and Computation

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Deferred-acceptance auctions choose allocations by an iterative process of rejecting the least attractive bid. These auctions have distinctive computational and incentive properties that make them suitable for application in some challenging environments, such as the planned US auction to repurchase television broadcast rights. For any set of values, any deferred acceptance auction with "threshold pricing"is weakly group strategy-proof, can be implemented using a clock auction, and leads to the same outcome as the complete-information Nash equilibrium of the corresponding paid-as-bid auction. A paid-asbid auction with a non-bossy bid-selection rule is dominance solvable if and only if it is a deferred acceptance auction.

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“…In this section we give a reduction from the maximum inner product problem to the problem of checking whether a given pair is part of any or all stable matchings, showing that these questions are SETH-hard when d = c log n for some constant c. For general preferences, both questions can be solved in time O(n 2 ) [27,20] and are known to require quadratic time [33,38,19]. Theorem 9.…”

Section: Checking a Stable Pairmentioning

confidence: 99%

“…Gale and Shapley [17] proposed a quadratic time deferred acceptance algorithm for this problem which has helped clear matching markets in many real-world settings. For arbitrary preferences, the deferred acceptance algorithm is optimal and even verifying that a given matching is stable requires quadratic time [33,38,19]. This is reasonable since representing all participants' preferences requires quadratic space.…”

Section: Introductionmentioning

confidence: 99%

Subquadratic Algorithms for Succinct Stable Matching

Künnemann

Moeller

Paturi

et al. 2016

Computer Science – Theory and Applications

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We consider the stable matching problem when the preference lists are not given explicitly but are represented in a succinct way and ask whether the problem becomes computationally easier and investigate other implications. We give subquadratic algorithms for finding a stable matching in special cases of natural succinct representations of the problem, the d-attribute, d-list, geometric, and single-peaked models. We also present algorithms for verifying a stable matching in the same models. We further show that for d = ω(log n) both finding and verifying a stable matching in the d-attribute and d-dimensional geometric models requires quadratic time assuming the Strong Exponential Time Hypothesis. This suggests that these succinct models are not significantly simpler computationally than the general case for sufficiently large d.

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The communication requirements of social choice rules and supporting budget sets

Cited by 56 publications

References 44 publications

Markets versus governments

Markets versus governments

Deferred-acceptance auctions and radio spectrum reallocation

Subquadratic Algorithms for Succinct Stable Matching

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