Private Values Research Articles

Incomplete preferences or incomplete information? On Rationalizability in games with private values

I propose a notion of Rationalizability, called Incomplete Preference Rationalizability, for games with incomplete preferences. Under an appropriate topological condition, the incomplete preference rationalizable set is non-empty and compact. I argue that incomplete orderings can be used to model incomplete information in strategic settings. Drawing on this connection, I show that in games with private values the sets of incomplete preference rationalizable actions, of belief-free rationalizable actions (Battigalli et al., 2011; Bergemann and Morris, 2017), and of interim correlated rationalizable actions (Dekel et al., 2007) of the universal type space coincide.

Truthful Matching with Online Items and Offline Agents

We study truthful mechanisms for welfare maximization in online bipartite matching. In our (multi-parameter) setting, every buyer is associated with a (possibly private) desired set of items, and has a private value for being assigned an item in her desired set. Unlike most online matching settings, where agents arrive online, in our setting the items arrive one by one in an adversarial order while the buyers are present for the entire duration of the process. This poses a significant challenge to the design of truthful mechanisms, due to the ability of buyers to strategize over future rounds. We provide an almost full picture of the competitive ratios in different scenarios, including myopic vs. non-myopic agents, tardy vs. prompt payments, and private vs. public desired sets. Among other results, we identify the frontier up to which the celebrated e/(e-1)\\documentclass[12pt]{minimal} \\usepackage{amsmath} \\usepackage{wasysym} \\usepackage{amsfonts} \\usepackage{amssymb} \\usepackage{amsbsy} \\usepackage{mathrsfs} \\usepackage{upgreek} \\setlength{\\oddsidemargin}{-69pt} \\begin{document}$$e/(e-1)$$\\end{document} competitive ratio for the vertex-weighted online matching of Karp, Vazirani and Vazirani extends to truthful agents and online items.

Lifecycle model-based evaluation of infant 4CMenB vaccination in the UK

ObjectivesInvasive meningococcal disease, an uncommon but severe disease, imposes catastrophic health and economic burdens. Cost–utility analysis (CUA) assumes separability in lifetime health and economic variables and cannot capture the full value of preventing such burdens. We overcome these limitations with a retrospective societal perspective cost–benefit analysis (CBA) of meningococcal serogroup B vaccination (4CMenB) of one infant cohort in the United Kingdom using a health-augmented lifecycle model (HALM) incorporating health’s interactions with consumption, earnings, non-market time and financial risk.MethodsWe used a static Markov model of vaccination’s health impact and an HALM to estimate the private willingness to pay (PWTP) for the intrinsic and instrumental value of health under perfect capital markets, financial risk protection in the absence of insurance against permanent disability, parental spillovers, and acute phase disability. We estimated social WTP (SWTP) incorporating social severity preferences. We estimated rates of return that inform health payer reimbursement decisions, finance ministry budgeting decisions, and legislature taxation decisions. An expert Advisory Board investigated the validity of applying the HALM to infant 4CMenB.ResultsThe PWTP for a 2 + 1 vaccination schedule is £395, comprising £166 of disability insurance value, £79 of positive parental spillover value, £28 in the value of averting acute phase disability, and £122 in residual intrinsic and instrumental value of health. SWTP is £969.ConclusionsHALM-based CBA provides an empirically richer, more utility–theoretically grounded approach to vaccine evaluation than CUA, demonstrating good value for money for legislatures (based on private values) and for all decision-makers (based on social values).

Implementation in undominated strategies with applications to auction design, public good provision and matching

This paper considers implementation in undominated strategies by finite mechanisms, where multiple outcomes may be implemented at a single state of the world. We establish a sufficient condition for implementation applicable in a general environment with private values. We apply it to three well-known environments and obtain strikingly permissive results. In the single-object auction, the second-price auction with a reserve price can be outperformed in terms of revenue. In the public good provision problem, the Vickrey–Clarke–Groves mechanism can be outperformed from the viewpoint of a designer who wishes to minimise deficit subject to efficiency. In the two-sided matching environment where preferences on one side of the market are private information, the social choice correspondence that outputs all stable matchings at every preference profile, is implementable.

Auction design with data‐driven misspecifications: Inefficiency in private value auctions with correlation

We study the existence of efficient auctions in private value settings in which some bidders form their expectations about the distribution of their competitor's bids based on the accessible data from past similar auctions consisting of bids and ex post values. We consider steady states in such environments with a mix of rational and data‐driven bidders, and we allow for correlation across bidders in the signal distributions about the ex post values. After reviewing the working of the approach in second‐price and first‐price auctions, we establish our main result that there is no efficient auction in such environments.

Evaluative representation of China's political image in modern Russian Media

The object of the study is the evaluative characteristics of the image of China presented in modern Russian media. The subject of the study is the content and language features of the estimated representation of the political image of China as one of the leading geopolitical forces in the world. The material of the work was published by Russian Internet media (2020-2023). The author examines in detail the features of the evaluation of the image of the head of state, Xi Jinping, as well as the implementation of China's domestic and foreign policy. The positive and negative evaluative characteristics of China's political image are revealed. Particular attention is paid to the formation of private values. The linguistic means of expressing evaluation used in the texts of modern Russian mass media are characterized. The conducted research allows us to conclude that a generally positive political image of China is being formed in modern Russian Internet media (81% of positive ratings). On the positive side, the personal qualities of the head of state, which are manifested in the implementation of his political activities, are evaluated. The economic situation in the country, the nature of foreign policy towards the United States, and participation in resolving the conflict between Russia and Ukraine are also generally positively assessed. A negative assessment is present only when describing the aggressive strategies in Xi Jinping's policy. In most cases, a positive absolute assessment of China's policy is designed to form the image of a stable state and a strong "player" in the political arena. The novelty of the conducted research lies in the appeal to the study of the information field relevant to the Russian public in connection with the high dynamics of the development of international Russian-Chinese relations. The peculiarities of the evaluative representation of the image of the state and the policy implemented by it in the media allow us to draw conclusions about the mechanisms of formation of evaluative meanings and impact on the mass audience in the modern information space.

Revisiting the Private Value of Scientific Inventions

Revisiting the Private Value of Scientific Inventions

Two results on auctions with endogenous entry

First, the value distribution does not depend on the number of entrants under an independence assumption on entry signals. Second, separability of unobserved auction heterogeneity and private values carries over from potential bidders to entrants under several information structures.

The impact of virtual reality on private value dimensions: a healthcare case study

ABSTRACT The digitalization of public services is a growing phenomenon that affects providers and users alike. However, the impact of digitalization on the Public Service Logic remains understudied. We aim to understand how virtual reality impacts private value dimensions in public healthcare. Drawn from a dual-perspective of providers’ and users’ interviews and personal diaries, we contribute to value-in-context by underlining nuances of the user needs and service outcomes. Similarly, value-in-use shows patients’ experimentations and experiences with the virtual reality service. This study contributes to value dimensions, capturing the phenomenological aspects of the public service encounter in a complex digital healthcare ecosystem.

Communication, renegotiation and coordination with private values

An equilibrium is communication-proof if it is unaffected by new opportunities to communicate and renegotiate. We characterize the set of equilibria of coordination games with pre-play communication in which players have private preferences over the coordinated outcomes. The set of communication-proof equilibria is a small and relatively homogeneous subset of the set of qualitatively diverse Bayesian Nash equilibria. Under a communication-proof equilibrium, players never miscoordinate, play their jointly preferred outcome whenever there is one, and communicate only the ordinal part of their preferences. Moreover, such equilibria are robust to changes in players' beliefs and interim Pareto efficient.

Identification of Interdependent Values in Sequential First-Price Auctions

We revisit the (non-)identification of affiliated interdependent-value auctions from the perspective of sequential auctions introduced by Milgrom and Weber (2000). In contrast to static auctions, prices in early rounds affect bidding in later rounds in sequential auctions, generating enough variation for testing interdependent against private values and model identification. We develop nonparametric tests and identification results by exploring the functional dependence of the pseudo values in later rounds on the prices in early rounds. We also discuss applications and extensions of our results, including cases of non-identical goods, observed covariates and unobserved heterogeneity.

An information–Theoretic approach to partially identified auction models

We consider a situation in which we have data from ascending auctions with symmetric bidders, independent private values, and exogenous entry in which the bidders’ value distribution is partially identified. Focusing on the case in which the seller intends to use a second price auction, we discuss how to determine an optimal reserve price. We justify the use of maximum entropy, explore the properties of the estimand, determine the asymptotic properties of our maximum entropy estimator, evaluate its behavior in a simulation study, and demonstrate its use in a modest application. As an extension, we propose a maxmin decision rule with entropy regularization, which includes Aryal and Kim (2013) and the maximum entropy solution as extreme cases.

(In)efficiency in private value bargaining with naive players: Theory and experiment

The paper investigates two-player double-auction bargaining with private values in a setting with discrete two-point overlapping distributions of traders' valuations. We characterize parameter settings in which there exists a fully efficient equilibrium, and show that if there are traders that behave naively, i.e., set bid or ask equal to their valuation, then there is no equilibrium achieving full efficiency. We conduct an experiment to test the theoretical possibility that the presence of naive traders can reduce efficiency. We find, however, that efficiency is not lower in the presence of naive traders. Subjects mostly set bid/ask prices strategically but they do not coordinate on a fully efficient equilibrium and the extent of strategic behavior is not different in the presence of naive players. We show that a learning model of noisy strategy adjustment explains the observed behavior better than other (equilibrium or non-equilibrium) models.

Selling Assets: Are Sellers Better Off with Strong Buyers?

When do sellers benefit from the presence of a strong buyer? In a second price auction with independent private values and entry costs for buyers, we allow for one buyer to be stochastically “strong.” We show that, when buyers make positive net profits, seller revenue is higher with a stronger buyer. In contrast, when competition is endogenous so that all buyers other than the strong buyer break even, seller revenue is always lower in the presence of a strong buyer. We also study seller actions such as providing buyer subsidies, setting reserve prices, securing multiple strong buyers, bundling assets, and optimally choosing the time of sale that might alleviate the fall in revenue. This paper was accepted by Will Cong, Finance. Supplemental Material: The online appendix and data are available at https://doi.org/10.1287/mnsc.2023.4938 .

Collecting Multi-type and Correlation-Constrained Streaming Sensor Data with Local Differential Privacy

Local differential privacy (LDP) is a promising privacy model for distributed data collection. It has been widely deployed in real-world systems (e.g. Chrome, iOS, macOS). In LDP-based mechanisms, an aggregator collects private values perturbed by each user and then analyses these values to estimate their statistics, such as frequency and mean. Most existing works focus on simple scalar value types, such as boolean and categorical values. However, with the emergence of smart sensors and Internet of Things, high-dimensional data are gaining increasing popularity. In many cases where more than one type of sensor data are collected simultaneously, correlations exist between various attributes of such data, e.g. temperature and luminance. To ensure LDP for high-dimensional data, existing solutions either partition the privacy budget ϵ among these correlated attributes or adopt sampling, both of which dilute the density of useful information and thus result in poor data utility. In this paper, we propose a relaxed LDP model, namely, univariate dominance local differential privacy (UDLDP), for high-dimensional data. We quantify the correlations between attributes and present a correlation-bounded perturbation (CBP) mechanism that optimizes the partitioning of privacy budget on each correlated attribute. Furthermore, we extend CBP to support sampling, which is a common bandwidth reduction technique in sensor networks and Internet of Things. We derive the best allocation strategy of sampling probabilities among attributes in terms of data utility, which leads to the correlation-bounded perturbation mechanism with sampling (CBPS). Finally, we discuss how to collect and leverage the correlation from real-time data stream with a by-round algorithm to enhance the utility. The performance of the proposed mechanisms is evaluated and compared with state-of-the-art LDP mechanisms on real-world and synthetic datasets.

The Influence of Customer Perceived Value on Customer Satisfaction at Yumchi Resto & Catering Harapan Indah, Bekasi

Yumchi Resto & Catering Harapan Indah is one of the restaurants in Bekasi that has been able to survive due to the impact of the Covid-19 pandemic, then after the pandemic can maintain and increase its sales up to 2-fold in 2021. This significant increase makes researchers want to research the factors that influence this. The purpose of this writing is to determine the effect of customer perceived value on customer satisfaction at the Yumchi Resto & Catering Harapan Indah restaurant. This study examines the influence of customer perceived value (value that customers feel) seen from the dimensions of emotional value, price value, quality value, social value on customer satisfaction. This study uses quantitative research, namely by distributing questionnaires to find out customer opinions related to the problems studied. The number of respondents in this study were 100 respondents, using purposive sampling method, namely determining the sample based on the criteria or knowledge of the sample taker. Methods of data analysis using simple linear regression with the SPSS program. The results of the study with the t test show that customer perceived value with the emotional value dimension has a positive and insignificant impact on customer satisfaction of 0.799; variable customer perceived value with the dimension of price value has a significant influence on customer satisfaction of 0.045; the customer perceived value variable with the quality value dimension has a negative impact and an insignificant effect on customer satisfaction of 0.601; and the customer perceived value variable with the social value dimension has a positive and insignificant impact on customer satisfaction of 0.739. Based on the results, it was briefly concluded that on the dimensions of Customer Perceived Value which is composed of Price Value, Social Value, Emotional Value, and Quality Value simultaneously or partially, the significance does not have an impact on Yumchi Resto & Catering Harapan Indah customer satisfaction. As for partially, the dimensions of Emotional Value, Quality Value, and Social Value have no significant impact on Yumchi Resto & Catering Harapan Indah customer satisfaction. However, the Price Value dimension has a significant impact on consumer satisfaction at Yumchi Resto & Catering Harapan Indah. This means that customers have a sense of satisfaction from Yumchi Resto & Catering Harapan Indah based on the price value applied. Efforts to increase customer satisfaction at Yumchi Resto & Catering can be carried out based on private values so that consumers can maintain their choice and trust in Yumchi Resto & Catering Harapan Indah, Bekasi and can recommend it to others

Voting with interdependent values: The Condorcet winner

We generalize the standard, private values voting model with single-peaked preferences and incomplete information by introducing interdependent preferences. Our main results show how standard mechanisms that are outcome-equivalent and implement the Condorcet winner under complete information or under private values yield starkly different outcomes if values are interdependent. We also propose a new notion of Condorcet winner under incomplete information and interdependent preferences, and discuss its implementation. The new phenomena in this paper arise because different voting rules (including dynamic ones) induce different processes of information aggregation and learning.

Withholding and damage in Bayesian trade mechanisms

We study the optimality of allowing the designer to withhold or damage resources in Bayesian incentive compatible mechanisms for bilateral trade with independent private values. The following results hold when the buyer and the seller have discrete value distributions. Burning money or withholding the good from both traders never enhances welfare. Similarly, damaging the good for the buyer cannot increase welfare. By contrast, damaging the good for the seller may improve welfare. However, such welfare improvements are possible only if the damage hurts some lower valuation type of seller more severely than the highest valuation type. Results extend to the case of continuous value distributions under certain hypotheses regarding virtual values. Methods also apply to optimal Bayesian implementation for allocation problems. In the absence of property rights, damaging goods for any agent has negative welfare consequences.

First-mover advantage and the private value of public science

Technical progress increasingly relies on the use of scientific knowledge. But if much of this knowledge is in the public domain, can it be a source of private value? We find that average private returns to using public science are small, especially in crowded technical fields. This is consistent with the view that the expected profit from an input that competitors can easily access is low. However, private value is higher when a firm is the first to use science, partly because it can secure broader patents relative to later users. Corporate participation in scientific research is a strong predictor of first use, consistent with the view that participation in science raises familiarity with relevant scientific advances.

Information design in optimal auctions

We study the information design problem in a single-unit auction setting. The information designer controls independent private signals according to which the buyers infer their binary private values. Assuming that the seller adopts the optimal auction due to Myerson (1981) in response, we characterize both the buyer-optimal information structure, which maximizes the buyers' surplus, and the seller-worst information structure, which minimizes the seller's revenue. We translate both information design problems into finite-dimensional, constrained optimization problems in which one can explicitly solve for the optimal information structure. In contrast to the case with one buyer (Roesler and Szentes, 2017), we show that with two or more buyers, the symmetric buyer-optimal information structure is different from the symmetric seller-worst information structure. The good is always sold under the seller-worst information structure but not under the buyer-optimal information structure. Nevertheless, as the number of buyers goes to infinity, both symmetric information structures converge to no disclosure. We also show that in our ex ante symmetric setting, an asymmetric information structure is never seller-worst but can generate a strictly higher surplus for the buyers than the symmetric buyer-optimal information structure.