Theme of Workshop：Mechanism Design and Information Design
Session Chair：Yifei Sun, Professor, University of International Business and Economics
♦ SPEECH1：Information Aggregation and Full Implementation
Yifei Sun
Professor
sunyifei@uibe.edu.cn
University of International Business and Economics
Sun Yifei, Professor at the University of International Business and Economics. His main research areas are game theory and information economics, with a focus on mechanism design and implementation theory. His research findings have been published in high-level international journals such as the Journal of Political Economy, Theoretical Economics, Journal of Economic Theory, and Games and Economic Behavior. He has presided over and completed one National Natural Science Foundation of China Youth Project (which was rated as “Excellent” upon conclusion) and one general project. He was also selected for the 2023 Wu Jiapei Funding Plan by the Chinese Society of Information Economics.
Abstract: Motivated by the rapid development of usage-based insurance (UBI), we study relational contracts under moral hazard in a competitive insurance market. The insurer can employ both an objective and a subjective signal about the insured’s behavior as, respectively, the explicit and implicit incentive components of the contract. We show that the implicit incentive component may not be used even if it is enforceable when the subjective signal is relatively noisy. We also show that the objective and subjective signals can be both substitutes and complements. Whereas a more accurate subjective signal can always improve the insurance market efficiency, the welfare implication of the objective signal accuracy can be non-monotonic. In particular, if a more accurate objective signal leads to a sufficiently attractive fallback of relational contract, it may reduce the efficiency of the relational contract, or even make all relational contracts infeasible. Our results thus suggest that the regulation of UBI markets that reinforce the enforceability of subjective signal can mitigate the distortions in the design of UBI contracts and the ex-ante investment in related monitoring technologies.
♦ SPEECH2：Certification Design in the Market for Lemons
Pei Ting
Assistant Professor
peterpeiting@hotmail.com
Huazhong University of Science and Technology
Pei Ting is an assistant professor of Huazhong University of Science and technology. He got Bachelor degree of Science in Math major in National University of Singapore (NUS), and received PhD degree in Economics in 2021. His research interests are game theory, network games, and information economics. He has published papers in GEB and IJGT.
Abstract：We study the optimal certification design in an environment in which a certifier charges a uniform fee to certify a seller with private types and type-dependent outside options. We find that the optimal certification depends not only on the willingness to pay (WTP) for each type but also on the true value of the seller’s type. For a subset of types, the Top Cover Condition (TCC), i.e., the cumulative WTP of any top percentile types is always non-negative, is necessary for all types demanding the certification with some incentive compatible policy. When the outside options are non-decreasing, we show the sufficiency of TCC and the number of certificates required in the certification. We further provide an algorithm to find the optimal set of types to certify with a given fee. We find that the certifier will exclude types with low WTP. Moreover, with same WTP, those types with both high true value and outside options will be excluded prior to ones with low true value.
♦ SPEECH3：Information design in allocation with costly verification
Xiangqian Yang
Associate Professor
yangxiangqian@hnu.edu.cn
Hunan University
Yang Xiangqian is an associate professor at the School of Economics and Trade, Hunan University. He obtained his Ph.D. in Economics from the Department of Economics, National University of Singapore. His research interests include information design, mechanism design, game theory, and decision theory. His research findings have been published or are under revision in field top journals such as Journal of Economic Theory and International Economic Review. He is currently leading projects funded by the National Natural Science Foundation of China and the Youth Natural Science Foundation of Hunan Province.
Abstract：We study optimal information design on top of a single-object allocation problem with costly verification a la Ben-Porath et al. (2014). Agents learn private signals about the allocation payoff to the principal from signal distributions which are influenced by an information designer. The principal designs a mechanism to maximize her payoff based upon the designed information. We identify the agent-optimal information and the principal-optimal information. When there is only one agent, any agent-optimal information is principal-worst. When there are two or more agents, some agent-optimal information remains principal-worst; moreover, we characterize when agent-optimal information design strictly increases the probability of allocation. Finally, through identifying the principal-worst information, we obtain an optimal robust allocation mechanism for the principal.