Robust Market Interventions

Andrea Galeotti, Benjamin Golub, Sanjeev Goyal, Eduard Talam\`as and Omer Tamuz

Papers from arXiv.org

Abstract: When can interventions in markets be designed to increase surplus robustly -- i.e., with high probability -- accounting for uncertainty due to imprecise information about economic primitives? In a setting with many strategic firms, each possessing some market power, we present conditions for such interventions to exist. The key condition, recoverable structure, requires large-scale complementarities among families of products. The analysis works by decomposing the incidence of interventions in terms of principal components of a Slutsky matrix. Under recoverable structure, a noisy signal of this matrix reveals enough about these principal components to design robust interventions. Our results demonstrate the usefulness of spectral methods for analyzing imperfectly observed strategic interactions with many agents.

Date: 2024-11, Revised 2025-01
New Economics Papers: this item is included in nep-com, nep-gth and nep-reg
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http://arxiv.org/pdf/2411.03026 Latest version (application/pdf)

Related works:
Working Paper: Robust Market Interventions (2024)
Working Paper: Robust Market Interventions (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2411.03026

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