|dc.description.abstract||This dissertation examines two problems that may arise in matching problems.
The first two chapters deal with auctions for multiple units where bidders exhibit
externalities. The third chapter links risk aversion and information to unraveling in
Auctions can lead to efficient allocations in a wide class of assignment problems.
In the presence of externalities, however, efficiency may no longer be guaranteed.
This dissertation shows that a modification of Ausubel & Milgrom (2002)'s
generalized ascending price auction can be used to allocate multiple items to bidders
in this case. Despite the presence of externalities, the resulting auction possesses
an efficient Nash equilibrium in pure strategies leading to a core allocation.
Furthermore, under certain restrictions on bidder valuations, truthful revelation of
valuations is found to a dominant strategy. The auction is augmented to include
explicitly the auctioneer's preferences over final outcomes. Externalities affecting
non-participants can thus be accounted for straightforwardly.
In Cournot game where capacity constraints are determined in an auction prior
to the market interaction, the valuations for capacity in the auction will exhibit externalities.
Using the generalized ascending price auction allows the bidding firms to
reach a joint profit maximizing capacity allocation below the Cournot equilibrium
level. Since this comes at the expense of consumer surplus the auctioneer may have
an incentive to specify its own valuation taking into account total surplus maximization.
Then, the final capacity allocation is bounded by the profit maximizing
and the Cournot equilibrium level.
Unraveling labor markets, that is periodic labor markets where appointments
are made earlier and earlier often leading to a break-down of the market, have been
linked to risk-averse workers attempting to reduce the variability of the outcome.
In many cases, early contracts are used to fix a wage when the relative supply and
demand of workers in the market and hence the division of surplus is uncertain. This
chapter represents a different approach. Both workers and firms have preferences
over matchings and uncertainty is introduced through the quality of workers. Risk
averse workers or risk-loving firms are found to be necessary for early contracting.
Further research strategies are suggested.||en_US
|dc.title||Matching Issues: An auction with externalities and unraveling matching markets||en_US
|dc.contributor.publisher||Digital Repository at the University of Maryland||en_US
|dc.contributor.publisher||University of Maryland (College Park, Md.)||en_US