Found 8 article(s) for author 'Scott Duke Kominers'

To Thine Own Self Be True? Incentive Problems in Personalized Law

To Thine Own Self Be True? Incentive Problems in Personalized Law. Scott Duke Kominers, 2020, Paper, “Recent years have seen an explosion of scholarship on “personalized law.” Commentators foresee a world in which regulators armed with big data and machine learning techniques determine the optimal legal rule for every regulated party, then instantaneously disseminate their decisions via smartphones and other “smart” devices. They envision a legal utopia in which every fact pattern is assigned society’s preferred legal treatment in real time. But regulation is a dynamic process; regulated parties react to law. They change their behavior to pursue their preferred outcomes—which often diverge from society’s—and they will continue to do so under personalized law: They will provide regulators with incomplete or inaccurate information. They will attempt to manipulate the algorithms underlying personalized laws by taking actions intended to disguise their true characteristics. Personalized law can also (unintentionally) encourage regulated parties to act in socially undesirable ways, a phenomenon known as moral hazard. Moreover, regulators seeking to combat these dynamics will face significant constraints. Regulators will have imperfect information, both because of privacy concerns and because regulated parties and intermediaries will muddle regulators’ data. They may lack the authority or the political will to respond to regulated parties’ behavior. The transparency requirements of a democratic society may hinder their ability to thwart gamesmanship. Concerns about unintended consequences may further lower regulators’ willingness to personalize law. Taken together, these dynamics will limit personalized law’s ability to optimally match facts to legal outcomes. Personalized law may be a step forward, but it will not produce the utopian outcomes that some envision.Link

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Investment Incentives in Near-Optimal Mechanisms

Investment Incentives in Near-Optimal Mechanisms. Scott Duke Kominers, February 25, 2020, Paper, “In a Vickrey auction, if one bidder has an option to invest to increase his value, the combined mechanism including investments is still fully optimal. In contrast, for any β < 1, we find that there exist monotone allocation rules that guarantee a fraction β of the allocative optimum in the worst case but such that the associated mechanism with investments by one bidder can lead to arbitrarily small fractions of the full optimum being achieved. We show that if a monotone allocation rule satisfies a new property called ARNIE and guarantees a fraction β of the allocative optimum, then in the equilibrium of the threshold auction game with investments, at least a fraction β of the full optimum is achieved. We also establish generalizations and a partial converse, and show that some well-known approximation algorithms satisfy the ARNIE property.Link

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Chain stability in trading networks

Chain stability in trading networks. Scott Duke Kominers, 2020, Paper, “In a general model of trading networks with bilateral contracts, we propose a suitably adapted chain stability concept that plays the same role as pairwise stability in two-sided settings. We show that chain stability is equivalent to stability if all agents’ preferences are jointly fully substitutable and satisfy the Laws of Aggregate Supply and Demand. In the special case of trading networks with transferable utility, an outcome is consistent with competitive equilibrium if and only if it is chain stable.Link

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Bloomberg Opinion Radio: Weekend Edition for 1-24-20

Bloomberg Opinion Radio: Weekend Edition for 1-24-20. Scott Duke Kominers, January 24, 2020, Audio, “Hosted by Janet Wu. Guests: Brian Chappatta, Bloomberg Opinion debt columnist: “Why Do Students Owe More If Borrowing Is Down?” Scott Duke Kominers, MBA Class of 1960 Associate Professor of Business Administration at Harvard Business School, and a Bloomberg Opinion columnist: “Fake AI People Won’t Fix Online Dating.” Nir Kaissar, Bloomberg Opinion columnist and Founder of Unison Advisors: “BlackRock Muddies the Social-Investing Waters.” Tara Lachapelle, Bloomberg Opinion columnist: “Hate TV Ads? Peacock May Change Your Mind.” Noah Smith, Bloomberg Opinion columnist: “Why Hostility to Immigration Seems to Run So Deep.”Link

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Collusion in Brokered Markets

Collusion in Brokered Markets. Scott Duke Kominers, September 7, 2019, Paper, “The U.S. residential real estate agency market presents a puzzle for economic theory: commissions on real estate transactions have remained constant and high for decades even though agent entry is frequent and agents’ costs of providing service are low. We model the real estate agency market, and other brokered markets, via repeated extensive form games; in our game, brokers first post prices for customers and then choose which agents on the other side of the market to work with. We show that prices appreciably higher than the competitive prices can be sustained (for a fixed discount factor) regardless of the number of brokers; this is done through strategies that condition willingness to transact with each broker on that broker’s initial posted prices. Our results can thus rationalize why brokered markets exhibit pricing high above marginal cost despite fierce competition for customers; moreover, our model can help explain why agents and platforms who have tried to reduce commissions have had trouble entering the market.Link

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Respect for Improvements and Comparative Statics in Matching Markets

Respect for Improvements and Comparative Statics in Matching Markets. Scott Duke Kominers, August 21, 2019, Paper, “One of the oldest results in the theory of two-sided matching is the entry comparative static, which shows that under the Gale–Shapley deferred acceptance algorithm, adding a new agent to one side of the market makes all the agents on the other side weakly better off. Here, we give a new proof of the entry comparative static, by way of a well-known property of deferred acceptance called respect for improvements. Our argument extends to yield comparative static results in more general settings, such as the matching with slot-specific preferences framework.Link

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A Compact, Logical Approach to Large-Market Analysis

A Compact, Logical Approach to Large-Market Analysis. Scott Duke Kominers, June 26, 2019, Paper, “In game theory, we often use infinite models to represent “limit” settings, such as markets with a large number of agents or games with a long time horizon. Yet many game-theoretic models incorporate finiteness assumptions that, while introduced for simplicity, play a real role in the analysis. Here, we show how to extend key results from (finite) models of matching, games on graphs, and trading networks to infinite models by way of Logical Compactness, a core result from Propositional Logic. Using Compactness, we prove the existence of man-optimal stable matchings in infinite economies, as well as strategy-proofness of the man-optimal stable matching mechanism. We then use Compactness to eliminate the need for a finite start time in a dynamic matching model. Finally, we use Compactness to prove the existence of both Nash equilibria in infinite games on graphs and Walrasian equilibria in infinite trading networks.Link

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Building a Nonprofit Marketplace to Feed America

Building a Nonprofit Marketplace to Feed America. Scott Duke Kominers, November 20, 2018, Audio, “Feeding America is the third largest nonprofit in the United States, managing a network of more than 200 food banks nationwide. Harvard Business School professor Scott Duke Kominers and Chicago Booth School of Business professor Canice Prendergast discuss how the organization designed a marketplace that was efficient and fair for all participants.Link

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