2016 Best Paper Prizes

The Econometric Society congratulates the 2016 winners of the "Best Paper Prize" for its two journals Quantitative Economics and Theoretical Economics.  These awards highlight the best paper published in each of the journals in the areas of theoretical and empirical quantitative economics and economic theory. Winners are selected by the journals' editors and co-editors.

We are pleased to announce the following papers have been awarded the 2016 "Best Paper Prize":

Quantitative Economics
Brendan Kline and Elie Tamer, "Bayesian inference in a class of partially identified models,” Volume 7, Issue 2 (July 2016).
This paper develops a Bayesian approach to inference in a class of partially identified econometric models. Models in this class are characterized by a known mapping between a point identified reduced‐form parameter μ and the identified set for a partially identified parameter θ. The approach maps posterior inference about μ to various posterior inference statements concerning the identified set for θ, without the specification of a prior for θ. Many posterior inference statements are considered, including the posterior probability that a particular parameter value (or a set of parameter values) is in the identified set. The approach applies also to functions of θ. The paper develops general results on large sample approximations, which illustrate how the posterior probabilities over the identified set are revised by the data, and establishes conditions under which the Bayesian credible sets also are valid frequentist confidence sets. The approach is computationally attractive even in high‐dimensional models, in that the approach avoids an exhaustive search over the parameter space. The performance of the approach is illustrated via Monte Carlo experiments and an empirical application to a binary entry game involving airlines.

Theoretical Economics
Alexander Wolitzky, "Mechanism design with maxmin agents: theory and an application to bilateral trade,” Volume 11, Issue 3 (September 2016).
This paper studies mechanism design when agents are maxmin expected utility maximizers. A first result gives a general necessary condition for a social choice rule to be implementable. The condition combines an inequality version of the standard envelope characterization of payoffs in quasilinear environments with an approach for relating agents' maxmin expected utilities to their objective expected utilities under any common prior. The condition is then applied to give an exact characterization of when efficient trade is possible in the bilateral trading problem of Myerson and Satterthwaite (1983), under the assumption that agents know little beyond each other's expected valuation of the good (which is the information structure that emerges when agents are uncertain about each other's ability to acquire information). Whenever efficient trade is possible, it may be implemented by a relatively simple double auction format. Sometimes, an extremely simple reference price rule can also implement efficient trade.

Publication Date: 
Thursday, May 25, 2017

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