Related papers: Optimal Taxation under Imperfect Trust
We consider the fundamental scenario where a single item is to be sold to one of two agents. Both agents draw their valuation for the item from the same probability distribution. However, only one of them submits a bid to the mechanism. The…
Funding is a cost to trading desks that they see as an input. Current FVA-related literature reflects this by also taking funding costs as an input, usually constant, and always risk-neutral. However, this funding curve is the output from a…
Objective: This paper develops a theoretical framework explaining when and why AI explanations enhance versus impair human decision-making. Background: Transparency is advocated as universally beneficial for human-AI interaction, yet…
How should we think of the preferences of citizens? Whereas self-optimal policy is relatively straightforward to produce, socially optimal policy often requires a more detailed examination. In this paper, we identify an issue that has…
We use the notion of a promise to define local trust between agents possessing autonomous decision-making. An agent is trustworthy if it is expected that it will keep a promise. This definition satisfies most commonplace meanings of trust.…
The promise of AI is huge. AI systems have already achieved good enough performance to be in our streets and in our homes. However, they can be brittle and unfair. For society to reap the benefits of AI systems, society needs to be able to…
Many interesting problems in the Internet industry can be framed as a two-sided marketplace problem. Examples include search applications and recommender systems showing people, jobs, movies, products, restaurants, etc. Incorporating…
Optimal stopping is the problem of deciding when to stop a stochastic system to obtain the greatest reward, arising in numerous application areas such as finance, healthcare and marketing. State-of-the-art methods for high-dimensional…
Task allocation is a crucial process in modern systems, but it is often challenged by incomplete information about the utilities of participating agents. In this paper, we propose a new profit maximization mechanism for the task allocation…
We generalize classical results on the existence of optimal portfolios in discrete time frictionless market models to models with capital gains taxes. We consider the realistic but mathematically challenging rule that losses do not trigger…
Social trust prediction addresses the significant problem of exploring interactions among users in social networks. Naturally, this problem can be formulated in the matrix completion framework, with each entry indicating the trustness or…
In the present paper a model of a market consisting of real and financial interacting sectors is studied. Agents populating the stock market are assumed to be not able to observe the true underlying fundamental, and their beliefs are biased…
The optimal (`equilibrium') macroscopic properties of an economy with $N$ industries endowed with different technologies, $P$ commodities and one consumer are derived in the limit $N\to\infty$ with $n=N/P$ fixed using the replica method.…
This paper studies the robust optimal gain selection problem for financial trading systems, formulated within a \emph{double linear policy} framework, which allocates capital across long and short positions. The key objective is to…
We consider a selfish variant of the knapsack problem. In our version, the items are owned by agents, and each agent can misrepresent the set of items she owns---either by avoiding reporting some of them (understating), or by reporting…
We study social choice rules under the utilitarian distortion framework, with an additional metric assumption on the agents' costs over the alternatives. In this approach, these costs are given by an underlying metric on the set of all…
We study the design of an optimal insurance contract in which the insured maximizes her expected utility and the insurer limits the variance of his risk exposure while maintaining the principle of indemnity and charging the premium…
Tax evasion causes severe losses of government revenues and disturbs the economic order of fair competition. To help alleviate this problem, the latest tax evasion detection solutions utilize expert knowledge to extract features and then…
We consider the problem of fairly allocating indivisible public goods. We model the public goods as elements with feasibility constraints on what subsets of elements can be chosen, and assume that agents have additive utilities across…
Many models of economics assume that individuals distort objective probabilities. We propose a simple consistency condition on distortion functions, which we term distortion coherence, that ensures that the function commutes with…