Mechanism Design under Costly Signaling: the Value of Non-Coordination
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arXiv
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| Auteurs principaux: | , |
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| Format: | Preprint |
| Publié: |
2023
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| _version_ | 1866914363506425856 |
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| author | Li, Yingkai Qiu, Xiaoyun |
| author_facet | Li, Yingkai Qiu, Xiaoyun |
| contents | We study allocation mechanisms that utilize costly signaling as a screening tool. A social planner aims to maximize social welfare, defined as the weighted sum of agents' utilities, while implementing a specific allocation rule. Within a broad class of agent preferences, we show that coordination mechanisms (where recommended signals depend on joint reports) can be outperformed by non-coordination mechanisms (where signals depend solely on individual reports). We formalize the conditions under which the optimal mechanism features no coordination and demonstrate that such mechanisms are implementable through coarse-ranking contests. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2302_09168 |
| institution | arXiv |
| publishDate | 2023 |
| record_format | arxiv |
| spellingShingle | Mechanism Design under Costly Signaling: the Value of Non-Coordination Li, Yingkai Qiu, Xiaoyun Theoretical Economics Computer Science and Game Theory We study allocation mechanisms that utilize costly signaling as a screening tool. A social planner aims to maximize social welfare, defined as the weighted sum of agents' utilities, while implementing a specific allocation rule. Within a broad class of agent preferences, we show that coordination mechanisms (where recommended signals depend on joint reports) can be outperformed by non-coordination mechanisms (where signals depend solely on individual reports). We formalize the conditions under which the optimal mechanism features no coordination and demonstrate that such mechanisms are implementable through coarse-ranking contests. |
| title | Mechanism Design under Costly Signaling: the Value of Non-Coordination |
| topic | Theoretical Economics Computer Science and Game Theory |
| url | https://arxiv.org/abs/2302.09168 |