The Department of Economics of the Faculty of Social Sciences (FSS) of UM held the “Greater Bay Area Market Design Workshop 2024” earlier, bringing experts and scholars from around the world to explore new ideas in the field of market design.
Prof. Weixing Hu, Dean of FSS, warmly welcomed the experts and scholars to visit theUM and pointed out that this event would provide a rich platform for cooperation in the field of market design. Dean Hu also makes remarks to the participants about Macau and its economy, as well as the progress that has been made by the FSS and the Department of Economics in the previous years.
Prof. Inácio Bó of the Department of Economics delivered the welcome address, expressing gratitude to all participants for their presence. He emphasized the importance of collaborative dialogue on market design and encouraged attendees to share their diverse perspectives and insights. He emphasized the aim for the workshop, which aims to become a focal point establishing and strengthening the networks and collaborations between researchers in the field in the Greated Bay Area, Asia and beyond. This Workshop was held over two days, with 13 experts and scholars sharing their ideas.
“Strategy-Proofness and Competitive Equilibrium with Transferable Utility: Gross Substitutes Revisited” by Prof. Kenzo Imamura – University of Tokyo
Prof. Kenzo Imamura explored strategy-proofness and competitive equilibrium in many-to-one matching with continuous transfers and quasilinear utilities. He emphasized that if a competitive equilibrium and strategy-proof mechanism exists, each firm’s valuation must satisfy the gross substitutes condition, which is the only necessary condition. He noted that while various conditions for competitive equilibria exist, only the gross substitutes condition ensures their existence.
“Bundled School Choice” by Prof. Jun Zhang – Nanjing Audit University
Prof. Jun Zhang examined bundled school choice problems, in which students are able to include bundles of schools in their preferences. The model allows for an bundling of schools from exogenous department, enabling students to apply to any school within a bundle without ranking them. This approach helps express coarse preferences and may improve match rates. He supported his theory with a laboratory experiment demonstrating the system’s benefits and discussed its practical applications.
“Market Design with Distributional Objectives” by Prof. Isa Hafalir – University of Technology Sydney
Prof. Isa Hafalir examined market design with distributional objectives, focusing on the balance between diversity and merit in college admissions. He proposed choice rules that maximize merit while meeting specific distributional goals and analyzed their properties. Prof. Hafalir also identified subsets of applications on the Pareto frontier for both objectives and introduced two novel characterizations of matroids, contributing to the field of market design.
“Robust Exchange” by Prof. Yosuke Yasuda – Osaka University
Prof. Yosuke Yasuda examined robust exchanges in the housing market, focusing on the impact of participant dropout. He showed that dropout can lead to transaction failures, disadvantaging the Top Trading Cycles (TTC) algorithm due to its reliance on large cycles. To address this, he proposed a k-greedy algorithm that limits cycle size, which outperformed the TTC algorithm in simulations, particularly with smaller k values (e.g., k=3, 4, 5) and minimal dropout risk.
“Correlation Neglect in College Admission: An Experimental Evidence” by Prof. Yan Song – Shandong University
Prof. Yan Song’s study on correlation neglect in college admissions explored how students often ignored interrelated admission probabilities, leading to overly aggressive strategies. Controlled experiments revealed that reminders and process changes did not reduce these strategies. However, the use of the Iterative Deferred Acceptance mechanism significantly increased the percentage of students choosing optimal strategies. He also highlighted the importance of addressing correlation neglect and suggested effective interventions to improve decision-making in school choice.
“A General Scholar Ranking Method: Incorporating Journal Quality and Citation Metrics into Scoring Rules” Prof. Chiu Yu Ko – Chinese University of Hong Kong
Prof. Chiu Yu Ko introduced a new scholar ranking method that combines citation-based and journal-based metrics. This framework incorporates journal quality through a defined Journal List of influential journals. He featured two scoring rule families: Journal List Counting (JLC) rules, using the i10-index, and CES rules, using the Euclidean index. The study explored their relationship through JLC+CES and JLC*CES. An axiomatic approach characterizes the rules, supported by numerical analysis to validate the model.
“Designing a New market: Civil Service Jobs Selection, Assignment and Reassignment in Brazil” by Prof. Inácio Bó – University of Macau
Prof. Inácio Bó discussed his contributions to redesigning Brazil’s centralized selection system for public sector employment. The project required a comprehensive overhaul of all hiring stages to ensure both efficiency and fairness while meeting policymakers’ objectives. Prof. Bó particularly emphasized the crucial decision-making process for selecting which candidates’ written exams would be evaluated. This selection stage, he demonstrated, significantly impacts the viability of subsequent hiring phases. His innovative approach incorporated the deferred acceptance algorithm in a novel way to optimize this selection process. The presentation concluded with current statistics from Brazil’s implementation of the system, which has drawn over 2.6 million applicants.
“The Unequal Effects of Information Provision on College Admission Outcomes” by Prof. Li Chen – Tongji University
Prof. Li Chen examined the effects of information provision in college admissions, finding unequal impacts. Analyzing a rich data from a dynamic admissions system used in the province of Inner Mongolia, the study showed that students scoring just below batch cutoffs were admitted to more selective colleges than those just above.These students had higher chances of attending graduate schools and earning more. The effects were strongest in larger batches where information was crucial, highlighting the importance of effective information design in college admissions.
“How to Implement Soft Reserves in India: A Market Design Approach with Historical Perspective”by Prof. Bertan Turhan – Iowa State University
Prof. Bertan Turhan examined the implementation of soft reserves in India’s affirmative action program amid judicial review since the 1990s. The Supreme Court’s rulings established “hard” constraints in Indra Sawhney vs. Union of India (1992) and supported “soft” reservations in Ashoka Kumar Thakur vs. Union of India (2008) without clear guidelines. He highlighted the incompatibility of these rulings and proposed assignment rules to align with judicial norms, offering insights for implementing reserve policies that optimize economic efficiency while adhering to legal mandates.
“Affirmative Action’s Cumulative Fractional Assignments”by Prof. Manshu Khanna – Peking University HSBC School
Prof. Manshu Khanna analyzed the Central Educational Institutions (Reservation in Teachers’ Cadre) Act, 2019, which reserves teaching vacancies in India’s central educational. He identified flaws in the Supreme Court’s solution and the act, as both failed to reserve seats simultaneously at the university and departmental levels. He proposed an alternative solution using approximate fractional assignments, offering a middle ground between conflicting approaches and demonstrating the broader relevance of this method.
“Unambiguous Efficiency of Random Allocations”by Prof. Eun Jeong Heo – University of Seoul
Prof. Eun Jeong Heo examined ordinal rules for allocating indivisible goods via lotteries, focusing on how these rules considered agents’ rankings of degenerate lotteries due to cognitive or incentive constraints. These rules could only meet welfare properties based on first-order stochastic dominance. She introduced a new efficiency concept for ordinal rules, demonstrating that while it limited traditional notions of fairness, it allowed for a diverse set of rules.
“The Existence of a Pure-strategy Nash Equilibrium in a Discrete Ponds Dilemma”by Prof. Alex Nesterov – HSE University
Prof. Alex Nesterov examined Nash equilibrium in discrete dilemmas where agents choose a resource and divide it based on their “weight” at that resource. Applications include students selecting colleges and politicians entering races. He found pure-strategy Nash equilibria in three cases: 1) equal weights for all agents, 2) identical resources, and 3) only two resources. It also established that an approximate Nash equilibrium exists for large numbers of players, but the existence of a Nash equilibrium in general remains an open question. In a second part of his presentation, Prof. Nesterov introduced the problem of sponsored university positions, in which private companies sponsor the tuition of students who then commit to working at these companies.
“Information Disclosure and Full Surplus Extraction in Mechanisms with Non-contractible Actions” by Prof. Bo Chen – Shenzhen University
Prof. Bo Chen examined information disclosure and full surplus extraction (FSE) in non-contractible action mechanisms, specifically symmetric all-pay auctions where bidders’ types depend on an unknown state. The auction organizer uses Bayesian persuasion to disclose information, enabling bidders to narrow down to three possible states. He concluded that full surplus extraction is achievable only if bidders cannot earn rents under the prior distribution.
