MLSE Seminar

Authors: Yanru Sun, Christopher Kops and Dries Vermeulen

Date and time: January 20th, 13:00-14:00 

Title: Maximizing Social Welfare: Emission allowance in Cournot Model

Abstract: In the context of emission reduction in a Cournot duopoly model, we explore the government-optimal allocation of emission allowances to maximize social welfare. We model this situation as a two-stage Stackelberg game, where in stage one the government issues emission allowances to each firm, and in stage two both firms play a (restricted) Cournot game in which total carbon emission is not allowed exceed the allowance. This study has an intriguing conclusion: in many cases, the government-optimal strategy is either to enforce zero pollution or allowing firms to pollute freely. This reveals that standard procedures to allocate allowances, such as auctions and grandfathering, may be suboptimal, and thus in all likelihood an outcome of a political negotiation process rather than an autonomous welfare maximizing decision by a social planner.

Authors: Marc Schröder, Galit Ashkenazi-Golan, and Janos Flesch

Date and time: January 29th, 13:00-14:00 

Title: Searching for a mobile hider in a directed bipartite graph

Abstract: We examine a dynamic search game played between two players, called the hider and the searcher. The hider has the option to stay at a vertex or to travel along one of the outgoing arcs. The searcher chooses an arbitrary vertex and if the hider is there, then the hider is found and the game ends. The searcher's goal is to minimize the expected search time, whereas the hider's goal is to maximize it. One interpretation of the game is that a rescue team searches possible locations of an injured person on two sides of a river, while considering the worse-case scenario.

Authors: Uğur Guler, Frank Phillipson, Andre Berger, Thijs Veugen

Date and time: February 24th, 13:00-14:00 

Title: A Fair and Efficient Way of Cost Sharing in Collaborative VRP

Abstract: In modern logistics, competition and market fragmentation often lead to inefficiencies, as companies design their delivery routes independently. Collaborative Vehicle Routing Problem has emerged as a promising approach to address this issue by allowing companies to form coalitions, share depots and customers, and jointly optimize their routes to reduce total transportation costs. While collaboration yields significant efficiency gains, it also raises the challenge of allocating these savings fairly among participants. In this work, we propose an algorithm that simultaneously minimizes the total routing cost and determines a fair cost allocation. We prove that the proposed method satisfies three key fairness properties from cooperative game theory. Furthermore, we benchmark the algorithm against established solution concepts to highlight its practicality and efficiency. Finally, we present empirical results on Vehicle Routing Problem instances to demonstrate the performance and applicability of our approach.

Authors: Federico Fioravanti, Zoi Terzopoulou

Date and time: March 31st, 13:00-14:00 

Title: Anchor-proofness in Voting

Abstract: This work contributes to a foundational question in economic theory: how do individual-level cognitive biases interact with collective choice mechanisms? We study a setting where voters hold intrinsic preference rankings over a set of alternatives but cast approval ballots to determine the collective outcome. The ballots are shaped by an anchoring bias: alternatives are presented sequentially by a social planner, and a voter approves an alternative if and only if it is acceptable and strictly preferred to all alternatives previously encountered. We first analyze which approval-based voting rules are anchor-proof, in the sense that they always select the same winner regardless of the presentation order. We show that this requirement is extremely demanding: only very restrictive rules satisfy it. We then turn to the potential influence of the social planner. On the upside, when the planner has no information about the voters' intrinsic preferences, she cannot manipulate the outcome.

Authors: Johannes Hörner, Markus Reisinger, Christian Seel and Frauke Stehr

Date and time: April 28th, 13:00-14:00 

Title: Asymmetric Hotelling Competition

Abstract: This paper considers Hotelling competition between asymmetric players, such as political candidates with a valence component in an electoral campaign or price-differentiated firms that choose their positions in the product space. We provide a full characterization of the mixed-strategy Nash equilibrium. In equilibrium, the advantaged player randomizes at positions close to the center, while the disadvantaged player randomizes across more extreme positions. The equilibrium has technically novel features such as multiple mass points and gaps in the support. Our results address open problems in political economy, industrial organization, and contest theory. As an illustrating example, we derive a subgame-perfect equilibrium of a game where two firms compete by first choosing prices and then locations.

Author: Kristof Bosmans

Date and time: May 12th, 13:00-14:00 

Title: From Pareto and Lorenz to leximin

Abstract: We study Paretian-egalitarian social rankings, which satisfy the Pareto principle while incorporating an egalitarian concern. For the latter, we start with the Lorenz principle, which endorses Lorenz improvements. Imposing the Pareto and Lorenz principles jointly can generate cycles, so no transitive social ranking can satisfy both. We therefore restrict the domain of the Lorenz principle: the weak Lorenz principle endorses a Lorenz improvement only if it cannot be part of a Pareto–Lorenz cycle. We show that anonymity, the Pareto principle and the weak Lorenz principle uniquely characterize the leximin ranking.