March 23, 2019 (Saturday)

Room B224, Economics and Management School, Wuhan University

09:30—10:30

· Title: Supermodular correspondences and comparison of multi-prior beliefs

· Authors: Pawel Dziewulski (U. Sussex) and John Quah (JHU and NUS)

· Abstract: Economic decisions often involve maximizing an objective whose value is itself the outcome of another optimization problem. This decision structure arises in multi-output production and choice under uncertainty with multi-prior beliefs. To analyze comparative statics in these models, we introduce a theory of supermodular correspondences. In particular, we employ this theory to generalize the notion of first order stochastic dominance to multi-prior beliefs, allowing us to characterize conditions under which greater optimism leads to higher action.

· Chair: Xiaoxi Li

10:40—11:00

Take photos and Break

11:00—12:00

· Title: Robustly optimal reserve price

· Authors: Wei He (CUHK) and Jiangtao Li (SMU)

· Abstract: We study a robust version of the single-unit auction problem. The auctioneer has confidence in her estimate of the marginal distribution of a typical bidder’s valuation for the object, but she is uncertain about the joint distribution. Focusing on second-price auctions, we solve for the robustly optimal reserve price that generates the highest revenue guarantee; that is, the greatest lower bound of revenue across all joint distributions that are consistent with the marginals.

· Chair: Mingjun Xiao

12:00—14:00

Lunch

14:00—15:00

· Title: The substitutes condition and public policy

· Authors: Fuhito Kojima (Stanford), Ning Sun (NAU), and Ning Neil Yu (NAU)

· Abstract: In a Kelso-Crawford job matching framework, we consider two types of public policies: [1] imposing arbitrary constraints on the sets of doctors that hospitals are allowed to hire, and [2] modifying hospitals' revenue functions by adding transfer functions, interpreted as subsidy or taxation. A constraint preserves the substitutes condition if and only if it is a "generalized interval constraint," which is a slight generalization of an "interval constraint" that specifies the minimum and maximum numbers of doctors to be hired. A transfer function preserves the substitutes condition if and only if it is a sum of an additively separable function and a cardinally concave one. Under mild technical assumptions, the preservation of the substitutes condition guarantees the existence of competitive equilibrium and other properties of the matching problem.

· Chair: Lining Han

15:00—15:20

Break

15:20—16:20

· Title: Equilibrium delay in bargaining with buyer’s outside option

· Authors: Dongkyu Chang (CityU) and Jong Jae Lee (WHU)

· Abstract: This paper investigates how an outside option leads to a delay in bilateral bargaining over the price of an item in the following environment: (i) both the buyer’s valuation of the item; and (ii) the value of his outside option are unobservable to the seller. Recognizing that the seller gains by committing herself to a delay in the optimal contract, we examine whether such a delay is sustainable by the seller even without commitment power. Our main result is that the answer is positive if and only if the buyer’s outside option is allowed to have a zero value with positive probability. Under this condition two different forces, namely positive selection and self-punishment, take effect together, allowing seller to build her commitment power endogenously in equilibrium. If this condition fails, then the two forces interfere with each other, thereby failing to sustain an equilibrium delay.

· Chair: Xiang Sun

16:20—18:00

Campus tour

18:30—20:30

Dinner