arXiv subjects

Kiho Yoon

Publications and source records attributed to Kiho Yoon.

9 recordsLinked to original sources

arXiv2026

Demand reduction and initial endowments in consignment auctions

Consignment auctions, in which bidders first receive free initial endowments of a good and must then consign them to a subsequent uniform price auction, are often used in emissions allowance trading for the environmental regulation of greenhouse gas emissions. We study consignment auctions where many asymmetric bidders have flat demands up to their respective quantity constraints. We first characterize the equilibrium outcome and then examine the effects of initial endowments and total supply. If bidders' initial endowments increase or the total supply decreases, the equilibrium price increases whereas the social welfare and the auctioneer's revenue may increase or decrease. In particular, the revenue may increase even though fewer units remain in the hands of the auctioneer since an increase in initial endowments can prevent the low price equilibrium resulting from demand reduction.

econ.TH↗

arXiv2026

On the sufficiency of unidirectional incentive compatibility in auctions

We study optimal auction design when the direction of bidders' deviations is restricted. We show that the optimal revenue when bidders can only underbid their true values cannot exceed the optimal revenue when bidders may freely underbid or overbid. Thus, unidirectional incentive compatibility is sufficient for full incentive compatibility for revenue maximization. We prove this equivalence through linear programming duality in a discrete model, which makes it possible to analyze the feasibility of allocation rules in multi-agent environments.

econ.TH↗

arXiv2025

Upstream competition and exclusive content provision in media markets

With a multilateral vertical contracting model of media markets, we examine upstream competition and contractual arrangements in content provision. We analyze the trade of content by the Nash bargaining solution and the downstream competition by the Hotelling location model. We characterize the equilibrium outcomes and the contractual arrangements for various vertical structures. We show that the possibility of exclusive contracts rises when the value of the premium content increases, the degree of horizontal differentiation in the downstream market decreases, the importance of advertising revenue decreases, and the relative bargaining power of upstream firm decreases.

econ.TH↗

arXiv2024

Uniform price auction with quantity constraints

We study the equilibria of uniform price auctions where many asymmetric bidders have flat demands up to their respective quantity constraints. We present an iterative procedure that systematically finds an equilibrium outcome as well as an ascending auction that has this outcome as a dominant strategy equilibrium outcome. Demand reduction and low price equilibrium may occur since it is advantageous for a bidder to give up some of his/her demand and get the remaining demand at a low price rather than to get his/her entire demand at a higher price. We show that a low price equilibrium is the only possible equilibrium when no bidder's quantity constraint is large enough to cover the supply.

econ.TH↗

arXiv2024

Optimal Mechanism in a Dynamic Stochastic Knapsack Environment

This study introduces an optimal mechanism in a dynamic stochastic knapsack environment. The model features a single seller who has a fixed quantity of a perfectly divisible item. Impatient buyers with a piece-wise linear utility function arrive randomly and they report the two-dimensional private information: marginal value and demanded quantity. We derive a revenue-maximizing dynamic mechanism in a finite discrete time framework that satisfies incentive compatibility, individual rationality, and feasibility conditions. It is achieved by characterizing buyers' utility and deriving the Bellman equation. Moreover, we propose the essential penalty scheme for incentive compatibility, as well as the allocation and payment policies. Lastly, we propose algorithms to approximate the optimal policy, based on the Monte Carlo simulation-based regression method and reinforcement learning.

cs.GT↗

arXiv2021

Dynamic mechanism design: An elementary introduction

This paper introduces dynamic mechanism design in an elementary fashion. We first examine optimal dynamic mechanisms: We find necessary and sufficient conditions for perfect Bayesian incentive compatibility and formulate the optimal dynamic mechanism problem. We next examine efficient dynamic mechanisms: We establish the uniqueness of Groves mechanism and investigate budget balance of the dynamic pivot mechanism in some detail for a bilateral trading environment. This introduction reveals that many results and techniques of static mechanism design can be straightforwardly extended and adapted to the analysis of dynamic settings.

econ.TH↗

arXiv2021

Optimal selling time with evolving private information

We study the problem of when to sell one indivisible object to a buyer whose value from immediate allocation follows a privately observed Markov process. Incomplete information transforms what would otherwise be a standard Markovian optimal stopping problem into a dynamic mechanism design problem. We characterize dynamic incentive compatibility by the envelope formula and integral monotonicity. We first solve the relaxed problem that maximizes the seller's revenue over feasible stopping rules while ignoring integral monotonicity, and then give conditions under which the optimal rule of the relaxed problem is dynamically implementable. Under dynamic single crossing and stochastic monotonicity, the optimal rule of the relaxed problem takes a threshold form, and incomplete information weakly delays sale relative to complete information along every realization. We also give a condition for the optimality of a one-step look-ahead rule. Examples illustrate how the informational state depends on the type process.

econ.TH↗

arXiv2021

Robust double auction mechanisms

We study the robust double auction mechanisms, that is, the double auction mechanisms that satisfy dominant strategy incentive compatibility, ex-post individual rationality and ex-post budget balance. We first establish that the price in any robust mechanism does not depend on the valuations of the trading players. We next establish that, with a non-bossiness assumption, the price in any robust mechanism does not depend on players' valuations at all, whether trading or non-trading. Our main result is the characterization result that, with a non-bossy assumption along with other assumptions on the properties of the mechanism, the generalized posted mechanism in which a constant price is posted for each possible set of traders is the only robust double auction mechanism. We also show that, even without the non-bossiness assumption, it is quite difficult to find a reasonable robust double auction mechanism other than the generalized posted price mechanism.

econ.TH↗

arXiv2020

The uniqueness of dynamic Groves mechanisms on restricted domains

This paper examines necessary and sufficient conditions for the uniqueness of dynamic Groves mechanisms when the domain of valuations is restricted. Our approach is to appropriately define the total valuation function, which is the expected discounted sum of each period's valuation function from the allocation and thus a dynamic counterpart of the static valuation function, and then to port the results for static Groves mechanisms to the dynamic setting.

econ.TH↗