Stephen Ching

An alternative characterization of the uniform rule

We consider the problem of allocating some amount of a commodity among a group of agents with single-peaked preferences. We show that the uniform rule is the only rule satisfying equal treatment of equals, Pareto efficiency, and strategy-proofness. This characterization strengthens two interesting results due to Sprumont (1991). Our method of proof involves only elementary arguments.

Multi-valued strategy-proof social choice rules

Abstract. In this paper we introduce a new definition of strategy-proofness for multi-valued social choice correspondences. We prove two Gibbard-Satterthwaite type results for strategy-proof social choice correspondences. These results show that allowing multiple outcomes as social choices will not necessarily lead to an escape from the Gibbard-Satterthwaite impossibility theorem.

A simple characterization of the uniform rule

Abstract We prove, by a simple and direct argument, that the uniform rule is the only allocation rule satisfying Pareto efficiency, Pareto indifference, strategy-proofness, and no-envy on the domain of economies with single-plateaued preferences and a collective endowment. A similar result can be obtained with single-plateaued preferences replaced by single-peaked preferences [Sprumont (1991)].

Mundell Revisited: A Simple Approach to the Costs and Benefits of a Single Currency Area

This paper develops an analytical model to evaluate the costs and benefits of a single currency area within a unified framework, inspired by the separate arguments of Mundell (1961) and (1973). The more familiar argument is that, in the presence of country-specific shocks, a single currency area imposes a welfare cost associated with the lack of exchange rate adjustment. But Mundell (1973) argues that a single currency area offers risk-sharing benefits in the face of country-specific shocks and restricted ability for capital markets to facilitate consumption insurance. In our model, a single currency area, as compared with a system of national currencies and floating exchange rates, brings both welfare costs associated with the absence of exchange rate adjustment and welfare benefits associated with risksharing. The model provides a utility-based comparison of costs versus benefits. While theoretically, either monetary regime may dominate, quantitatively, the net welfare benefits of a single currency area are likely to be negative.

Contestability of the urban land market: an event study of Hong Kong land auctions

The traditional theory of urban land markets assumes perfect contestability - the absolute freedom of market entry - that compels developers to bid up the land rent to equal the economic profit from land use. This assumption, however, is untested empirically due to the difficulties in measuring the ex ante economic profit of land acquisition. We overcome these difficulties by applying the event-study methodology to Hong Kong government land auctions. When a developer acquires a site at a price below its fair market value, the rationality of the stock market entails a positive abnormal return on the developers stock. Our analysis shows evidence of positive expected abnormal returns, indicating an imperfectly contestable land market. We further show that the expected abnormal return increases with the site value and the government land disposal level but decreases with the property market liquidity.

Risk Sharing and the Theory of Optimal Currency Areas: A Re-Examination of Mundell 1973

Mundell (1973) argues that a common currency area provides benefits for its members by offering insurance against region-specific shocks. We develop a simple model to analyse the nature of risksharing benefits of a single currency area for emerging market economies, based on Mundells hypothesis. An important pre-requisite for the risk-sharing benefits of a single currency is that there be limited trade among countries in national-currency denominated bonds. The evidence for emerging markets supports this assumption. In this case, we show that a single currency area may support risk sharing that could not be achieved under floating exchange rates. Based on a simple quantitative evaluation of our model, we show that the implied risk sharing can be substantial.

A characterization of the uniform rule with several commodities and agents

We consider a problem of allocating infinitely divisible commodities among a group of agents. More specifically, there are several commodities to be allocated and agents have continuous, strictly convex, and separable preferences. We establish that a rule satisfies strategy-proofness, unanimity, weak symmetry, and nonbossiness if and only if it is the uniform rule. This result extends to the class of continuous, strictly convex, and multidimensional single-peaked preferences.

Maximal and Supremal Domains for Strategy-Proofness

In this paper, we pose the following question in a private-good model. To what extent can the single-peaked domain be enlarged while preserving the existence of rules satisfying strategy-proofness, symmetry and unanimity? This formulation is adopted for three reasons. First, it marks a clear distinction between the two existing approaches to the maximal domain question in the literature. Second, it restores the role of strategy-proofness, which is suppressed by efficiency in an earlier result (Ching and Serizawa, 1998). Third, a private-good model allows us to conduct a richer analysis of strategy-proof rules. We show that the weakly single-peaked domain is the unique maximal domain for strategy-proofness, symmetry and unanimity. The weakly single-peaked domain is marginally bigger than the single-peaked domain. A diagnosis of the result reveals that maximal domain can be a stringent concept. A less stringent concept is proposed: supermal domain. (Supremal domain is analogous to the concept of supremum in an open interval.) All supermal domains for strategy-proofness, symmetry and unanimity are shown to be strictly smaller than the convex domain, which is slightly bigger than the weakly single-peaked domain. These results indicate that the assumption of single-peakedness essentially cannot be dispensed with if one is interested in strategy-proofness.