Anastas Tenev from the Institute of Economics at Corvinus University will present his paper “Information Design for Weighted Voting” (co-authored with Toygar T. Kerman) on September 20th at 10 AM, room QA405. One-to-one meetings with the speaker can be arranged; please contact the seminar organizers, Dr. Noémie Cabau (cabau.noemie@gtk.bme.hu) and Dr. Arseniy Samsonov (samsonov.arseniy@gtk.bme.hu).  

Abstract:  We consider a sender who wishes to persuade multiple receivers to vote in favor of a proposal and sends them correlated messages that are conditional on the true state of the world. The receivers share a common prior, wish to implement the outcome that matches the true state, and have homogeneous preferences, but are heterogeneous in their voting weights. Given a weight profile, an optimal signal can be represented by a tractable linear programming problem. We employ insights from cooperative game theory and interpret the voting problem as a simple game to analyze optimal communication for various voting situations. While public communication is optimal under weak, oligarchic, or dictatorial games, the sender can significantly benefit from private communication under symmetric, strong, or non-weak proper games. To the best of our knowledge, this is the first attempt to analyze a weighted voting application of Bayesian persuasion. 

The QSMS Research Group (BME) will be hosting two seminars this August 2022. One-to-one meetings with the speakers can be arranged; please contact the seminar organizers, Dr. Noémie Cabau (cabau.noemie@gtk.bme.hu) and Dr. Arseniy Samsonov (samsonov.arseniy@gtk.bme.hu).  

Dhandabani S from the Indian Institute of Technology Madras (Decision Engineering Lab, Department of Management Studies) will be presenting his paper Modeling interactions between vertically cooperative and horizontally competitive newsvendor on the 30^th of August 2022 at 4PM, Room QA406. 

Abstract:  Consider a market served by both the supplier and the retailer, a typical example of a dual-channel supply chain. Supplier holds a fixed number of perishable inventories and shares them with the retailer for better reach. Also, because of the price matching guarantee, both the parties agree on a uniform retail price for customers, and it is set by the supplier along with the wholesale price. We assume that both the parties are profit-maximising newsvendors, i.e., retailer and supplier are quantity-setting and price-setting newsvendors, respectively. However, given the nature of the setting, their decisions are dependent on each other. As a result, none of them can control the environment solely and both set out to maximise their own profits, which calls for a game-theoretic perspective on the coopetitive (vertically cooperative and horizontally competitive) two-newsvendor setting. We model the interactions between the supplier and retailer as a Stackelberg game, with the supplier being the leader and the retailer being the follower. Given the price[1]sensitive nature of the demand, the retailer estimates her optimal quantity as a function of retail and wholesale prices as a function of the reaction curve. Exploiting the backward induction, the supplier leverages the retailer’s optimal quantity to base its pricing decisions. As the optimal solution becomes intractable for a generic demand uncertainty, focusing only on additive demand uncertainty, we derive sufficient optimality conditions for the supplier’s profit function to be concave with respect to both the retail and wholesale prices. Furthermore, we compute the best feasible set of quantity and price points that satisfy the already established restrictions and assumptions. Finally, extensive sensitivity analysis of the model parameters yields the following several managerial insights, out of which a few novel and counterintuitive are as follows: (i) supplier’s expected profit decreases with the capacity, (ii) the more the variation, supplier’s gain increases whereas retailer’s gain decreases, (iii) with a highly sensitive market, both the parties’ profits decrease, and (iv) retailer’s profit is concave with respect to the market potential. 

The QSMS Research Group (BME) will be hosting two seminars this August 2022. One-to-one meetings with the speakers can be arranged; please contact the seminar organizers, Dr. Noémie Cabau (cabau.noemie@gtk.bme.hu) and Dr. Arseniy Samsonov (samsonov.arseniy@gtk.bme.hu).  

Mikhail Freer from the University of Essex (Department of Economics) will be presenting his paper Constitutional Design (co-authored with César Martinelli) on the 23^rd of August 2022 at 4PM, Room QA406.  

Abstract: Constitution is the cornerstone of any democracy: defining both the basic rights of citizens and the rules of the political process. However, most political economy literature frequently overlooks the constitution as a whole, focusing on bargaining between legislator and executive. This paper expands the scope and considers all three branches of power in the constitutional mechanism. First, we show that the constitutional mechanism (even with the accountability of the executive and legislator) cannot be credible without the presence of the “fourth power” (civic society). However, this fourth power is not directly governed by the constitution, and to restore the credibility of the constitution, the two key features are (1) society is affected by the outcomes of legislative bargaining, and (2) the judiciary is responsive to public opinion. However, these features are not enough to restore the “efficiency” of the constitution; to do so, we need to ensure that society does not stop pressuring the government with just the resignation of the corresponding official but gets a more direct involvement in the further legislative bargaining.