No Arabic abstract
This note shows that the value of ambiguous persuasion characterized in Beauchene, Li and Li(2019) can be given by a concavification program as in Bayesian persuasion (Kamenica and Gentzkow, 2011). More specifically, it implies that an ambiguous persuasion game can be equivalently formalized as a Bayesian persuasion game with distorted utility functions. This result is obtained under a novel construction of ambiguous persuasion.
We introduce a new updating rule, the conditional maximum likelihood rule (CML) for updating ambiguous information. The CML formula replaces the likelihood term in Bayes rule with the maximal likelihood of the given signal conditional on the state. We show that CML satisfies a new axiom, increased sensitivity after updating, while other updating rules do not. With CML, a decision makers posterior is unaffected by the order in which independent signals arrive. CML also accommodates recent experimental findings on updating signals of unknown accuracy and has simple predictions on learning with such signals. We show that an information designer can almost achieve her maximal payoff with a suitable ambiguous information structure whenever the agent updates according to CML.
We consider transferable-utility profit-sharing games that arise from settings in which agents need to jointly choose one of several alternatives, and may use transfers to redistribute the welfare generated by the chosen alternative. One such setting is the Shared-Rental problem, in which students jointly rent an apartment and need to decide which bedroom to allocate to each student, depending on the students preferences. Many solution concepts have been proposed for such settings, ranging from mechanisms without transfers, such as Random Priority and the Eating mechanism, to mechanisms with transfers, such as envy free solutions, the Shapley value, and the Kalai-Smorodinsky bargaining solution. We seek a solution concept that satisfies three natural properties, concerning efficiency, fairness and decomposition. We observe that every solution concept known (to us) fails to satisfy at least one of the three properties. We present a new solution concept, designed so as to satisfy the three properties. A certain submodularity condition (which holds in interesting special cases such as the Shared-Rental setting) implies both existence and uniqueness of our solution concept.
Edge bundling techniques cluster edges with similar attributes (i.e. similarity in direction and proximity) together to reduce the visual clutter. All edge bundling techniques to date implicitly or explicitly cluster groups of individual edges, or parts of them, together based on these attributes. These clusters can result in ambiguous connections that do not exist in the data. Confluent drawings of networks do not have these ambiguities, but require the layout to be computed as part of the bundling process. We devise a new bundling method, Edge-Path bundling, to simplify edge clutter while greatly reducing ambiguities compared to previous bundling techniques. Edge-Path bundling takes a layout as input and clusters each edge along a weighted, shortest path to limit its deviation from a straight line. Edge-Path bundling does not incur independent edge ambiguities typically seen in all edge bundling methods, and the level of bundling can be tuned through shortest path distances, Euclidean distances, and combinations of the two. Also, directed edge bundling naturally emerges from the model. Through metric evaluations, we demonstrate the advantages of Edge-Path bundling over other techniques.
We introduce a general Hamiltonian framework that appears to be a natural setting for the derivation of various production functions in economic growth theory, starting with the celebrated Cobb-Douglas function. Employing our method, we investigate some existing models and propose a new one as special cases of the general $n$-dimensional Lotka-Volterra system of eco-dynamics.
We analyze statistical discrimination in hiring markets using a multi-armed bandit model. Myopic firms face workers arriving with heterogeneous observable characteristics. The association between the workers skill and characteristics is unknown ex ante; thus, firms need to learn it. Laissez-faire causes perpetual underestimation: minority workers are rarely hired, and therefore, underestimation towards them tends to persist. Even a slight population-ratio imbalance frequently produces perpetual underestimation. We propose two policy solutions: a novel subsidy rule (the hybrid mechanism) and the Rooney Rule. Our results indicate that temporary affirmative actions effectively mitigate discrimination caused by insufficient data.