Working Papers by John O. Ledyard
# | Title | Authors | Date | Length | Paper | Abstract | |
---|---|---|---|---|---|---|---|
1450 | Price Formation in Multiple, Simultaneous Continuous Double Auctions, with Implications for Asset Pricing | Ledyard, John O. Asparouhova, Elena Bossaerts, Peter | 07/27/2020 | 65 | sswp_1450.pdf | We propose a Marshallian model for price and allocation adjustments in parallel continuous double auctions. Agents quote prices that they expect will maximize local utility improvements. The process generates Pareto optimal allocations in the limit. In experiments designed to induce CAPM equilibrium, price and allocation dynamics are in line with the model's predictions. Walrasian aggregate excess demands do not provide additional predictive power. We identify, theoretically and empirically, a portfolio that is closer to mean-variance optimal throughout equilibration. This portfolio can serve as a benchmark for asset returns even if markets are not in equilibrium, unlike the market portfolio, which only works at equilibrium. The theory also has implications for momentum, volume and liquidity. | |
1438 | Design of Tradable Permit Programs under Imprecise Measurement | Ledyard, John O. | 03/20/2018 | 27 | sswp1438.pdf | If the measurement of production in a commons is accurate and precise, it is possible to design a tradable permit program such that, under a fairly general set of conditions, the market equilibrium is efficient for the given aggregate permit level and everyone is better off after the permit program than before. Often, however, implementation of a tradable permit system is postponed or never undertaken because an inexpensive technology able to provide accurate and precise measurements does not exist. However, there often is an inexpensive technology which accurate but not precise. I study the possibilities for the design of a tradable permit system when the measurement technology involves an imprecise, indirect measure of production that contains statistical uncertainty. To the best of my knowledge, this has not been studied before. | |
1437 | Learning to Alternate | Arifovic, Jasmina Ledyard, John O. | 02/23/2018 | 34 | sswp1437_-_revised.pdf | The Individual Evolutionary Learning (IEL) model explains human subjects' behavior in a wide range of repeated games which have unique Nash equilibria. Using a variation of `better response' strategies, IEL agents quickly learn to play Nash equilibrium strategies and their dynamic behavior is like that of humans subjects. In this paper we study whether IEL can also explain behavior in games with gains from coordination. We focus on the simplest such game: the 2 person repeated Battle of Sexes game. In laboratory experiments, two patterns of behavior often emerge: players either converge rapidly to one of the stage game Nash equilibria and stay there or learn to coordinate their actions and alternate between the two Nash equilibria every other round. We show that IEL explains this behavior if the human subjects are truly in the dark and do not know or believe they know their opponent's payo s. To explain the behavior when agents are not in the dark, we need to modify the basic IEL model and allow some agents to begin with a good idea about how to play. We show that if the proportion of inspired agents with good ideas is chosen judiciously, the behavior of IEL agents looks remarkably similar to that of human subjects in laboratory experiments. | |
1424 | ACE: A Combinatorial Market Mechanism | Fine, Leslie Goeree, Jacob K. Ishikida, Takashi Ledyard, John O. | 11/03/2016 | 48 | SSWP_1424.pdf | In 1990 the South Coast Air Quality Management District created a tradable emissions program to more eciently manage the extremely bad emissions in the Los Angeles basin. The program created 136 different assets that an environmental engineer could use to cover emissions in place of installing expensive abatement equipment. Standard markets could not deal with this complexity and little trading occurred. A new combinatorial market was created in response and operated successfully for many years. That market design, called ACE (approximate competitive equilibrium), is described in detail and its successful performance in practice is analyzed. | |
1301 | Market design for fishery IFQ programs | Ledyard, John O. | 04/01/2009 | 33 pages | sswp1301.pdf | ||
1186 | A general characterization of interim efficient mechanisms for independent linear environments | Ledyard, John O. Palfrey, Thomas R. | 11/01/2003 | 50 pages | sswp1186c.pdf | We consider the class of Bayesian environments with independent types, and utility functions which are both quasi-linear in a private good and linear in a one-dimensional private-value type parameter. We call these "independent linear environments". For these environments, we fully characterize interim efficient allocation rules which satisfy interim incentive compatibility and interim individual rationality constraints. We also prove that they correspond to decision rules based on virtual surplus maximization, together with the appropriate incentive taxes. We demonstrate how these techniques can be applied easily to the design of auctions, markets, bargaining rules, public good provision, and assignment problems. | |
1095 | Inducing Liquidity In Thin Financial Markets Through Combined-Value Trading Mechanisms. | Ledyard, John O. Bossaerts, Peter Fine, Leslie R.T. | 08/01/2000 | 31 pages | Previous experimental research has shown that thin financial markets fail to fully equilibrate, in contrast with thick markets. A specific type of market risk is conjectured to be the reason, namely, the risk of partial execution of desired portfolio rearrangements in a system of parallel, unconnected double auction markets. This market risk causes liquidity to dry up before equilibrium is reached. To verify the conjecture, we organized markets directly as a portfolio trading mechanism, allowing agents to better coordinate their orders across securities. The mechanism is an implementation of the combined-value trading (CVT) system. We present evidence that our portfolio trading mechanism facilitates equilibration to the same extent as thick markets do. Like in thick markets, the emergence of equilibrium pricing cannot be attributed to chance. Inspection of order submission and trade activity reveals that subjects manage to exploit the direct linkages between markets presented by the CVT system. | ||
1094 | Experimental Testbedding of a Pollution Trading System: Southern California's Reclaim Emmissions Market. | Ishikida, Takashi Ledyard, John O. Olson, Mark Porter, David P. | 03/01/2000 | 49 pages | wp1094.pdf | ||
1093 | The First Use of a Combined Value Auction for Transportation Services. | Ledyard, John O. Olson, Mark Porter, David P. Swanson, Joseph A. Torma, David P. | 03/01/2000 | 14 pages | wp1093.pdf | ||
1092 | The Approximation of Efficient Public Good Mechanisms by Simple Voting Schemes. | Ledyard, John O. Palfrey, Thomas R. | 10/01/2000 | 30 pages | |||
1054 | A New and Improved Design For Multi-Object Iterative Auctions | DeMartini, Christine Kwasnica, Anthony M. Ledyard, John O. Porter, David P. | 11/01/1998 | 39 pages | sswp1054c.pdf | In this paper we present a new improved design for multi-object auctions and report on the results of tests of that design. We merge the better features of two extant but very different auction processes, the Milgrom FCC design (see Milgrom (1995)) and the Adaptive User Selection Mechanism (AUSM) of Banks et al. (1989)). Then, by adding one crucial new feature, we are able to create a new design, the Resource Allocation Design (RAD) auction process, which performs better than both. We are able to demonstrate, in both simple and complex environments, that the RAD auction achieves higher efficiencies, lower bidder losses, and faster times to completion without increasing the complexity of a bidder's problem. | |
1045 | The Design of Multi-Object Multi-Round Auction | Kwasnica, Anthony M. Ledyard, John O. Porter, David P. Scott, Julie | 11/01/1998 | sswp1045c.pdf | |||
1027 | Repeated Implementation | Kalai, Ehud Ledyard, John O. | 04/01/1997 | 15 pages | wp1027.pdf | In the traditional static implementation literature it is often impossible for implementors to enforce their optimal outcomes. And when restricting the choice to dominant-strategy implementation, only the dictatorial choices of one of the participants are implementable. Repeated implementation problems are drastically different. This paper provides a strong implementation "folk theorem" for patient implementors, every outcome function they care about is dominant-strategy implementable. | |
978 | The Results of Some Tests of Mechanism Designs for the Allocation and Pricing of Collections of Heterogeneous | Ledyard, John O. Porter, David P. Rangel, Antonio | 03/01/1996 | sswp978c.pdf | |||
956 | Interim Efficiency in a Public Goods Problem | Ledyard, John O. Palfrey, Thomas R. | 02/01/1996 | sswp956c.pdf | |||
917 | The Allocation of a Shared Resource Within an Organization | Ledyard, John O. Noussair, Charles N. Porter, David P. | 01/21/2010 | sswp917c.pdf | |||
916 | Mutually Destructive Bidding: The FCC Auction Design Problem | Bykowsky, Mark M. Cull, Robert J. Ledyard, John O. | 06/01/1998 | sswp916c.pdf | |||
896 | First Best Bayesian Privatization Mechanisms | Dudek, Maciej K. Kim, Taesung Ledyard, John O. | 04/01/1995 | sswp896.pdf | |||
874 | Using Computerized Exchange Systems to Solve an Allocation Problem in Project Management | Ledyard, John O. Porter, David P. Rangel, Antonio | sswp874c.pdf | ||||
861 | Public Goods: A Survey of Experimental Research | Ledyard, John O. | sswp861c.pdf | ||||
838 | Designing Organizations for Trading Pollution Rights | Ledyard, John O. Szakaly, Kristin E. | 02/01/1993 | sswp838.pdf | |||
836 | The Design of Coordination Mechanisms and Organizational Computing | Ledyard, John O. | 02/01/1993 | sswp836.pdf | |||
780 | Political Competition in a Model of Economic Growth; Some Theoretical Results. | Boylan, Richard T. Ledyard, John O. McKelvey, Richard D. | sswp780c.pdf | ||||
717 | Voting and Lottery Drafts as Efficient Public Goods Mechanisms. | Ledyard, John O. Palfrey, Thomas R. | 03/01/1990 | sswp717.pdf | |||
685 | Information Aggregation in Two-Candidate Elections. | Ledyard, John O. | sswp685.pdf | ||||
680 | Allocating Uncertain and Unresponsive Resources. | Banks, Jeffrey S. Ledyard, John O. Porter, David P. | 08/15/2013 | sswp680c.pdf | |||
648 | The Design of Mechanisms to Allocate Space Station Resources. | Banks, Jeffrey S. Ledyard, John O. Porter, David P. | 06/01/1987 | ||||
623 | Market Failure. | Ledyard, John O. | sswp623c.pdf | ||||
622 | Incentive Compatibility. | Ledyard, John O. | |||||
617 | The Economics of Space Station. | Ledyard, John O. | sswp617c.pdf | ||||
611 | Theories of Price Formation and Exchange in Double Oral Auctions. | Easley, David Ledyard, John O. | sswp611c.pdf | ||||
532 | The Scope of the Hypothesis of Bayesian Equilibrium. | Ledyard, John O. | |||||
224 | The Paradox of Voting and Candidate Competition: A General Equilibrium Analysis. | Ledyard, John O. | sswp224.pdf | ||||
203 | The Existence of Efficient and Incentive Compatible Equilibria with Public Goods. | Groves, Theodore Ledyard, John O. | 03/01/1978 | sswp203.pdf | |||
187 | Incentive Compatibility and Incomplete Information. | Ledyard, John O. | 01/21/2010 | sswp187.pdf |