Correction to: Reduced-form mechanism design and ex post fairness constraints

A Correction to this paper has been published: 10.1007/s40505-021-00211-1

Reduced-form mechanism design and ex post fairness constraints

This paper incorporates fairness constraints into the classic single-unit reduced-form implementation problem (Border in Economet J Econ Soc, 59(4):1175–1187, 1991, Econ Theory 31(1):167–181, 2007; Che et al. in Econometrica 81(6): 2487–2520, 2013; Manelli and Vincent in Econometrica, 78(6):1905–1938, 2010) with two agents. To do so, I use a new approach that utilizes the results from Kellerer (Math Ann 144(4):323–344, 1961) and Gutmann et al. (Ann Prob 19:1781–1797, 1991). Under realistic assumptions on the constraints, the conditions are transparent and can be verified in polynomial time.

Afriat and arbitrage

This paper presents a proof of Afriat’s (Int Econ Rev 8:67–77) theorem on revealed preference by using the idea that a rational consumer should not be vulnerable to arbitrage. The main mathematical tool is the separating hyperplane theorem.

Social discount rate: spaces for agreement

We study the problem of aggregating discounted utility preferences into a social discounted utility preference model. We use an axiom capturing a social responsibility of individuals’ attitudes to time, called consensus Pareto. We show that this axiom can provide consistent foundations for welfare judgments. Moreover, in conjunction with the standard axioms of anonymity and continuity, consensus Pareto can help adjudicate some fundamental issues related to the choice of the social discount rate: the society selects the rate through a generalized median voter scheme.

Fine cartels

This paper studies a simple model of a repeated cartel that can punish using both voluntary fines and inefficient prices wars. The idea is to use the fines in response to noisy signals of bad behavior and back it up with threats of price wars in response to the easily observed failure to pay the voluntary fines. The model is shown to deliver the insights of modern repeated game theory in an empirically accurate and tractable form.