Research

Working Papers

Security-bid Auctions with Information Acquisition (with Zongbo Huang) (Jan. 2023)

Abstract We study auctions in which buyers covertly acquire information at some cost and then bid securities contingent on the asset’s realized value to them. In first- and second-price auctions, steeper securities lead to lower marginal returns to information and potentially lower revenues. We then consider the revenue-maximizing linear mechanism. The mechanism is efficient. The winner pays in cash if their expected values exceed a threshold and pays in stock otherwise. The threshold decreases as the marginal cost of acquiring information increases. Our empirical analysis supports the model’s implications that stock payments are associated with lower takeover synergies and information costs.

Collective Decision Through an Informed Designer (with Xingtan Zhang) (Aug. 2022)

Abstract A mechanism designer must make a decision on behalf of a group of agents, who are privately informed about their valuations attached to the decision. The designer is imperfectly informed about agents’ private valuations. We give a necessary and sufficient condition on the designer’s information under which the ex post efficient decision rule can be implemented by an ex ante budget-balanced, dominant strategy incentive compatible and ex post individually rational mechanism. Our results have many potential applications, such as governments’ involvement in providing public goods and firms’ organizational structure.

Published and Forthcoming Papers

Endogenous Labor Market Cycles (with Cheng Wang) , International Economic Review, 63.2 (2022): 849-881.

Mechanism Design with Financially Constrained Agents and Costly Verification, Theoretical Economics, 16.3 (2021): 1139-1194.

Mechanism Design with Costly Verification and Limited Punishments, Journal of Economic Theory, 186 (2020): 105000.

Efficient Mechanisms with Information Acquisition, Journal of Economic Theory, 182 (2019): 279-328.

Approximation in Mechanism Design with Interdependent Values, Games and Economic Behavior, 103 (2017): 225-253. (A one-page abstract of an earlier version of this paper appeared in Proceedings of the 14th ACM Conference on Electronic Commerce. ACM, pp. 675-676.)

Dormant Papers

An Efficient Ascending Auction (Oct. 2016)