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econ.TH

econ.TH: explore 9 source-linked works published from 2026 to 2026, with original documents and citations.

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Sources: arxiv. Collection updated 2026-09-15. Counts describe this index, not the complete source archives.

The Endogeneity of Miscalibration: Impossibility and Escape in Scored Reporting

An agent's probability report is paid for twice: by a strictly proper scoring rule, and by an approval rule for the decision it triggers. In this classical decision-coupled setting, non-affine approval is known to defeat truthful reporting. We show the conflict is endogenous: when feasible, the welfare-maximizing approval rule is never affine. The distortion, however, is predictable and can be designed around. There is a reserve report at which pretending to be the marginal type costs exactly the approval prize. Approving at or above the reserve screens types perfectly under every strictly proper score, and the reserve does not depend on the type distribution. A Lipschitz rule with a single kink attains first-best exactly; under strict feasibility no continuously differentiable rule does. The binding constraint is steepness, not smoothness. First-best is attainable within a slope budget if and only if the budget is at least the critical slope: the steepest chord of the pretending cost up to the reserve. Below it the welfare loss is cubic in the shortfall. Where the pretending cost is convex up to the reserve, as for Brier, log and power scores, the critical slope is closed-form. The instances are AI-agent oversight and marketplace operation.

cs.GT

Mechanism Design for Alignment and Control

We develop a framework for mechanism design with AI agents whose alignment (preferences) and capabilities (feasible actions and information) are unknown. We want such agents to act on our behalf so mechanisms must incentivize both honesty and obedience. A one-sided imitation structure---capabilities can be concealed but not counterfeited---yields a revelation principle, a characterization of implementable policies via nested cyclical monotonicity, and conditions under which eliciting higher-order beliefs can discipline multiple agents. We apply our framework to stylized examples of (i) sandbagging in which a more capable agent pretends to be less capable; (ii) an alignment--interpretability trade-off, where the two are substitutes in the instrument but complements in value; (iii) discipline via peer scoring; (iv) coupling rewards to induce competition among multiple agents; and (v) scalable oversight and reward shaping.

econ.TH

Diversity-Fair Online Selection

Online selection problems arise in applications such as crowdsourcing and recruitment, where decision makers may seek representation across multiple, potentially overlapping demographic or skill dimensions. We study diversity-fair online selection under adversarial arrivals. A recruiter must immediately and irrevocably decide whether to accept each candidate while selecting at most \(K\) candidates. Before arrivals begin, the recruiter observes aggregate marginal information: the total number of candidates contributing to each of the \(d\) diversity dimensions. When the candidate pool is large, this information may be estimated from demographic statistics of the applicant population. We evaluate the expected utilities across dimensions using the generalized mean \(M_p=(d^{-1}\sum_{k=1}^d U_k^p)^{1/p}, -\infty\le p\le 1,\) where \(U_k\) denotes the expected utility of dimension \(k\). We first study max-min fairness, corresponding to \(p=-\infty\). We prove that no online policy can achieve a competitive ratio better than \(O(1/\sqrt d)\) and develop a policy with a competitive ratio \(1/[4(2+\sqrt2)\sqrt d]\), establishing the optimal dependence on \(d\) up to a constant factor. Without exact marginal information, the optimal worst-case rate falls to \(Θ(1/d)\), demonstrating the value of this information. We also extend the max-min analysis to nonbinary attributes and characterize the optimal dependence on their value range. Finally, we study generalized-mean objectives. For \(0\le p\le1\), we establish an optimal competitive ratio of \(Θ(1/\log d)\). For each fixed finite negative mean \(p=-q\), where \(q>0\), our policy achieves \(d^{-q/(2q+1)}\) up to polylogarithmic factors, matching the exponent of the corresponding impossibility bound.

econ.TH

On the Complexity of Bayesian Signal Processing

We develop a computational framework for Bayesian decision-making. We show that as long as no action is optimal in every state, Bayes-optimal choice is intractable. This hardness need not arise from large action, state, or signal spaces, nor from a complicated represented utility function: extracting enough information from a hard-to-interpret signal to act optimally can itself be computationally hard. We also characterize tractability across approximation notions and identify their sources of difficulty. Under the probably approximately correct criterion, sample-based Bayesian learning is tractable if and only if the signal support is bounded. Our results provide justifications for bounded rationality, costly Bayesian inference, and sample-based Bayesian learning.

econ.TH

Modeling the Structure of Human Behavior with AI Prompt Vectors

We introduce a general, easy-to-implement AI-based method for modeling and analyzing the structure and complexity of human behavior. We assign a large language model a "type vector" and then prompt it to choose actions across settings in which we observe human choices. For instance, the type vector (2, 4) becomes "You are a player characterized by the following profile: Altruism: 2 out of 5, Risk Aversion: 4 out of 5," after which it is prompted to make choices. We vary the dimensions (e.g., Altruism, Fairness, Trust,...) and values (e.g., 1-5) to minimize distance to human choices. Applying the method to 119,147 decisions made by 78,657 subjects from more than 35 countries across 10 classic economic game roles, we find that human behavior can be closely matched using three dimensions: Risk Aversion, Strategic Sophistication, and Trust. Moreover, the types needed to fit individuals across games cluster into fewer than a dozen groups, and can predict behavior in held-out games with different rules and available actions. The results suggest that behavior across diverse settings can be approximated by a low-dimensional, portable representation, supporting the possibility of general yet parsimonious theories across the behavioral sciences. More broadly, this new modeling method can provide insights into the structure of many human behaviors.

econ.TH

Near-Optimal Mechanisms for Resource Allocation Without Monetary Transfers

We study the problem in which a central planner sequentially allocates a single resource to multiple strategic agents using their utility reports at each round, but without using any monetary transfers. We consider general agent utility distributions and two standard settings: a finite horizon $T$ and an infinite horizon with $γ$ discounts. We provide general tools to characterize the convergence rate between the optimal mechanism for the central planner and the first-best allocation if true agent utilities were available. This heavily depends on the utility distributions, yielding rates anywhere between $1/\sqrt T$ and $1/T$ for the finite-horizon setting, and rates faster than $\sqrt{1-γ}$, including exponential rates for the infinite-horizon setting as agents are more patient $γ\to 1$. On the algorithmic side, we design mechanisms based on the promised-utility framework to achieve these rates and leverage structure on the utility distributions. Intuitively, the more flexibility the central planner has to reward or penalize any agent while incurring little social welfare cost, the faster the convergence rate. In particular, discrete utility distributions typically yield the slower rates $1/\sqrt T$ and $\sqrt{1-γ}$, while smooth distributions with density typically yield faster rates $1/T$ (up to logarithmic factors) and $1-γ$.

cs.GT

Scale-robust Auctions

We study auctions that are robust at any scale, i.e., they can be applied to sell both expensive and cheap items and achieve the best multiplicative approximation of the optimal revenue in the worst case. We first show that it is without loss of optimality to restrict attention to scale-invariant mechanisms whenever the family of possible distributions is closed under every positive rescaling. This conclusion uses no regularity or other distributional shape restriction. We then solve the two-agent, single-item problem with values drawn i.i.d. from an unknown regular distribution when only a high value bidder can receive a positive allocation. The robustly optimal mechanism in this class randomizes between the second-price auction, with probability approximately 0.806, and a markup auction that offers the item to the highest-valued bidder at a price equal to 2.447 times the second-highest value. Its worst-case approximation ratio is approximately 1.907.

cs.GT

From the Social Choice Problem to a Collusion-Proof Tendering Mechanism for Dynamic Stochastic Projects

The VCG family and the AGV mechanism are two classical approaches to efficient implementation in the static social choice problem. In 2024, Csóka et al. showed that AGV has critical weaknesses. In contrast, the transferable-utility Guaranteed Utility Mechanism (TU-GUM) retains all the standard desirable properties of AGV while adding further ones, including collusion-proofness, because it implements efficiency in Guaranteed Utility Equilibrium. TU-GUM also applies to a more general dynamic setting with multiple extensions. Moreover, TU-GUM is a special case of an even more general and robust mechanism that combines contingent first-price tendering with the coordinated execution of dynamic stochastic multi-agent projects through a surprisingly simple rule. This paper summarizes and connects existing results from a different perspective, with some minor new observations.

econ.TH

Refundable Deposits: How to Restore Cooperation in Finitely Repeated Games

While infinitely repeated games admit a rich set of Nash equilibria, finitely repeated games typically have a much smaller and often inefficient one. We show how to enlarge this set using deposits: in each period a player may place a refundable sum with a neutral intermediary, returned when the game ends and forfeited following a deviation. Paying these deposits is voluntary and incentive compatible at every stage, so no commitment by the players is assumed, the only commitment required being that of the intermediary to a refund rule fixed before play begins. The mechanism sustains payoff profiles more efficient than those of the standard equilibria, without altering the underlying game and without transfers between players. We demonstrate it on the prisoner's dilemma, a congestion game, and a public goods game, all settings where cooperation cannot emerge in the standard finitely repeated version. We also apply it to a dynamic common-pool resource, suggesting that the construction extends beyond repeated stage-games.

cs.GT
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