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Lemons and Peaches: A (Robust) Multi-stage Buying Mechanism with Multiple Applications
(2019)CEPR Discussion PapersWe introduce a four-stage, multi-price buying mechanism, which can be used by a (big) buyer to separate low-quality sellers - called "lemon" owners - from high-quality sellers - called "peach" owners. With a partition of sellers, the buyer obtains the commodities from the "peach" owners at a price that matches the willingness to sell. By contrast, "lemon" owners are trapped into selling their items at a low, or even negligible, price. Our ...Working Paper -
Appointed Learning for the Common Good: Optimal Committee Sitze and Efficient Rewards
(2020)CEPR Discussion PapersA population of identical individuals must choose one of two alternatives under uncertainty about what the right alternative is. Individuals can gather information of increasing accuracy at an increasing convex utility cost. For such a setup, we analyze how vote delegation to a committee and suitable monetary transfers for its members can ensure that high or optimal levels of information are (jointly) acquired. Our main insight is that ...Working Paper -
Staking Pools on Blockchains
(2022)CEPR Discussion PapersOn several proof-of-stake blockchains, agents engaged in validating transactions can open a pool to which others can delegate their stake in order to earn higher returns. We develop a model of staking pool formation in the presence of malicious agents and establish existence and uniqueness of equilibria. We then identify potential and risk of staking pools. First, allowing for staking pools lowers blockchain security. Yet, honest stake ...Working Paper -
Risky Vote Delegation
(2022)CEPR Discussion PapersWe study vote delegation and compare it with conventional voting. Typical examples for vote delegation are validation or governance tasks on blockchains and liquid democracy. There is a majority of "well-behaving" agents, but they may abstain or delegate their vote to other agents since voting is costly. "Misbehaving" agents always vote. Preferences of agents are private information and a positive outcome is achieved if well-behaving ...Working Paper -
Republic or Democracy? Co-voting!
(2022)CEPR Discussion PapersWe analyze a new constitutional decision-making rule—called ”Co-Voting”—which can be described as a combination of representative democracy (or republic, where citizens delegate their decision power to a parliament) and direct democracy (or just democracy, where citizens decide through referenda). We consider a simple model in which the electorate is partially uninformed about the consequences of policies and parliament members have ...Working Paper -
Vote Delegation Favors Minority
(2021)arXivWe examine vote delegation when delegators do not know the preferences of representatives. We show that free delegation favors minorities, that is, alternatives that have a lower chance of winning ex-ante. The same—but to a lesser degree—occurs if the number of voting rights actual voters can have is capped. However, when the fraction of delegators increases, the probability that the ex-ante minority wins under free and capped delegation ...Working Paper -
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The Effect of Handicaps on Turnout for Large Electorates: An Application to Assessment Voting
(2019)CEPR Discussion PapersWe analyze the effect of handicaps on turnout. A handicap is a difference in the vote tally between alternatives that strategic voters take as predetermined when they decide whether to turn out for voting. Handicaps are implicit in many existing democratic procedures. Within a costly voting framework with private values, we show that turnout incentives diminish considerably across the board if handicaps are large, while low handicaps yield ...Working Paper -
Crowdsearch
(2023)CEPR Discussion PapersA common phenomenon is crowdsearch, i.e. when a group of agents is invited to search for a valuable physical or virtual object, e.g. creating and patenting on an invention, solving an open scientific problem, searching for a vulnerability in softwares, or mining for a nonce in proof-of-work blockchains. We study a binary model of crowdsearch in which agents have different abilities to find the object. We characterize the types of equilibria ...Working Paper -
Appointed Learning for the Common Good: Optimal Committee Size and Efficient Rewards
(2020)SSRNA population of identical individuals must choose one of two alternatives under uncer- tainty about what the right alternative is. Individuals can gather information of increasing accuracy at an increasing convex utility cost. For such a setup, we analyze how vote del- egation to a committee and suitable monetary transfers for its members can ensure that high or optimal levels of information are (jointly) acquired. Our main insight is ...Working Paper