Selçuk Özyurt

A general impossibility result on strategy-proof social choice hyperfunctions

A social choice hyperfunction picks a non-empty set of alternatives at each admissible preference profile over sets of alternatives. We analyze the manipulability of social choice hyperfunctions. We identify a domain D[lambda] of lexicographic orderings which exhibits an impossibility of the Gibbard-Satterthwaite type. Moreover, this impossibility is inherited by all well-known superdomains of D[lambda]. As most of the standard extension axioms induce superdomains of D[lambda] while social choice correspondences are particular social choice hyperfunctions, we are able to generalize many impossibility results in the literature.

Strategy-proof resolute social choice correspondences

We qualify a social choice correspondence as resolute when its set valued outcomes are interpreted as mutually compatible alternatives which are altogether chosen. We refer to such sets as “committees” and analyze the manipulability of resolute social choice correspondences which pick fixed size committees. When the domain of preferences over committees is unrestricted, the Gibbard–Satterthwaite theorem—naturally—applies. We show that in case we wish to “reasonably” relate preferences over committees to preferences over committee members, there is no domain restriction which allows escaping Gibbard–Satterthwaite type of impossibilities. We also consider a more general model where the range of the social choice rule is determined by imposing a lower and an upper bound on the cardinalities of the committees. The results are again of the Gibbard–Satterthwaite taste, though under more restrictive extension axioms.

Upping the ante: the equilibrium effects of unconditional grants to private schools

This paper tests for financial constraints as a market failure in education in a low-income country. In an experimental setup, unconditional cash grants are allocated to one private school or all private schools in a village. Enrollment increases in both treatments, accompanied by infrastructure investments. However, test scores and fees only increase in the setting of all private schools along with higher teacher wages. This differential impact follows from a canonical oligopoly model with capacity constraints and endogenous quality: greater financial saturation crowds-in quality investments. The findings of higher social surplus in the setting of all private schools, but greater private returns in the setting of one private school underscore the importance of leveraging market structure in designing educational subsidies.

A Fraudulent Expert and Short-Lived Customers

A market where short-lived customers interact with a long-lived expert is considered. An expert privately observes whether or not a particular treatment is necessary for his customers and has an incentive to recommend the treatment even if it is unnecessary. Customers imperfectly observe the experts past actions. Truthful reporting at all times yields the expert his best equilibrium payoff when the expert is known to be opportunist (i.e., rational in the usual sense). If the customers believe that the expert might be an honest type, who always reports truthfully, then the expert can build his reputation for honesty, so then he defrauds his customers to achieve a higher payoff. In equilibrium, deception for a long period of time is extremely unlikely. However, it is a probability one event (in some of the equilibrium) when the experts customer is also a long-lived agent.

Building Reputation in a War of Attrition Game: Hawkish or Dovish Stance?

Abstract This paper examines a two-player war of attrition game in continuous-time, where (1) fighting (i. e., escalating the conflict) is costless for a player unless he quits, (2) at any point in time, each player can attack to his opponent and finalize the game with a costly war, (3) there is two-sided uncertainty regarding the players’ resolve, and (4) each player can choose his tone/stance (either hawkish or dovish) at the beginning of the game, which affects his quitting cost. The results imply that choosing hawkish (dovish) regime is optimal if and only if the benefit-cost ratio of the dispute is sufficiently high (low). If hawkish tone is going to give a player upper hand in a dispute, then choosing a more aggressive tone does not increase his payoff. However, choosing a more dovish tone increases a player’s payoff whenever dovish regime is optimal.