Department of Economics

Ashoka University is a private university located in Sonipat, Haryana, India, focusing on liberal arts and sciences. It was established in 2014.&nbsp;It is guided by an academic council of academics and scholars from around the world. The council sets the university&#39;s academic standard, advising on matters of curriculum, faculty hiring and research.&nbsp;

Ashoka University offers a full-time 3 (+ 1) year undergraduate programme. The University comprises of&nbsp;2500 plus students, with a mix of both national and international students.&nbsp; &nbsp;

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Ashoka University

We consider implementation of the efficient state in a large population public goods game. Agents are divided into a finite set of types. The planner asks agents to report types, which generates a reported type distribution. Based on reported types and distribution, the planner calculates the efficient strategy level and a Pigouvian transfer for each type of agent. We show that this direct mechanism satisfies incentive compatibility in strictly dominant strategies, strong budget balance and ex-post individual rationality.

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Economics Letters

Dominant strategy implementation in a large population public goods game

We axiomatically characterise a class of updating rules in the contexts of: (a) consumer's equilibrium; and (b) random choice by a decision maker. The updating rule captures the effect of absence of a product on the expenditure-share function in (a) and the effect of removal of an alternative on the choice probabilities of the remaining alternatives in (b). The class of updating rules, called hemi-Bayesian random choice rule can be described as follows: the expenditure-share or the probability-weight of the alternative that is removed is distributed proportionately to the alternatives belonging to its lower contour set according to some linear order. We show that this class of rules is the same as random consideration set rule as in Manzini and Mariotti (2014).

Consumer equilibrium, random choice and hemi-Bayesian revision rule

Economists are increasingly interested in subjective well-being, but the economic literature on perceptions of income adequacy, which is one of the factors that shape subjective well-being, is little. Our paper fills this lacuna. We utilize nationally representative data on perceptions of amounts considered as remunerative earnings from self-employment in India and examine how these are earnings shaped by social identity, namely, caste. We also investigate if institutional change such as the introduction of an employment guarantee scheme alters these perceptions. Finally, we examine the relationship between caste identity and actual earnings. We find that caste identity does shape both perceptions of income adequacy and actual earnings: lower-ranked groups perceive lower amounts as being remunerative and also earn lower amounts. Further, the employment guarantee scheme alters self-perceptions differentially for different caste groups, but in more nuanced ways than our ex-ante beliefs.

Review of Development Economics

Social identity and perceived income adequacy

The use of Randomized Control Trials (RCTs) in policy evaluations has revolutionized our approach to designing effective public policies. This essay argues that understanding the politics of policymaking is integral to the discussion of RCTs. The literature on RCTs has not sufficiently engaged with this issue. Examining a recent set of papers, the essay analyzes how the political process of policymaking as well as its political consequences may matter for the overall welfare implications of an intervention, including those involving the experimental method. Additionally, such political concerns with the method may be hard to avoid as both small and large scale RCTs may involve unintended and yet, consequential, political effects. Given the influence that RCTs enjoy within the discipline and in the wider development community, bringing the political economy considerations within the ambit of analyses could make policy evaluations more holistic, better our understanding, and consequently, bring research closer to practice. © 2019 Elsevier Ltd

World Development

(Don't) leave politics out of it: Reflections on public policies, experiments, and interventions

Farsighted formulations of coalitional formation, for instance, by Harsanyi and Ray and Vohra, have typically been based on the von Neumann–Morgenstern stable set. These farsighted stable sets use a notion of indirect dominance in which an outcome can be dominated by a chain of coalitional “moves” in which each coalition that is involved in the sequence eventually stands to gain. Dutta and Vohra point out that these solution concepts do not require coalitions to make optimal moves. Hence, these solution concepts can yield unreasonable predictions. Dutta and Vohra restricted coalitions to hold common, history-independent expectations that incorporate optimality regarding the continuation path. This paper extends the Dutta–Vohra analysis by allowing for history-dependent expectations. The paper provides characterization results for two solution concepts that correspond to two versions of optimality. It demonstrates the power of history dependence by establishing nonemptyness results for all finite games as well as transferable utility partition function games. The paper also provides partial comparisons of the solution concepts to other solutions. Copyright © 2020 The Authors.

Theoretical Economics

Coalition formation and history dependence

We study evolution of preferences in large population aggregative games. In such games, all agents in society interact with each other. The material payoff or fitness of agents is entirely individualistic. Subjective payoffs, which represent preferences, depend upon a non-individualistic component which is adjusted through a type-dependent preference parameter. Using the indirect evolutionary approach, we show that the individualistic type enjoys fitness dominance under any type distribution in such games. Hence, under a class of evolutionary dynamics that satisfy monotone percentage growth, all non-individualistic types are eliminated. We apply this analysis to two classes of non-individualistic preferences-altruistic and Kantian. Altruistic preferences put a positive weight on the externality imposed on society while Kantian preferences incorporate the Kantian categorical imperative. In two important economic models, the tragedy of the commons and the public goods game, we show that both these classes of preferences are eliminated.

Journal of Mathematical Economics

Elimination of non-individualistic preferences in large population aggregative games

This article seeks to understand stigma faced by students from groups who enter higher educational institutions on the basis of affirmative action. The article uses the theoretical insights from the “stereotype content model” which disentangles the social-psychological mechanisms of “externalization” and “internalization.” The data are from a primary survey administered to university students in India to understand the channel of stigma associated with caste-based affirmative action (AA). The article finds that despite a significant gap in entry scores at admission, there are no significant differences in the effort and academic attitudes between AA and non-AA students. Yet, there are clear and significant differences between caste groups that reveal the presence of stigma through the “externalization” mechanism, that is, upper caste peers tend to evaluate beneficiary performance prejudicially, indicating the prevalence of discriminatory attitudes toward students who are admitted through AA. However, there is no compelling evidence of “internalization”: that is, students from beneficiary groups do not necessarily internalize their peers' low evaluation of their own competence. These findings suggest the need for establishing an antidiscriminatory apparatus inside higher educational institutions to counter stigmatizing attitudes and microaggressions against AA admits.

Review of Black Political Economy

Double Jeopardy? Stigma of Identity and Affirmative Action

We propose a class of measures of welfare change that are based on the generalized Gini social welfare functions. We analyze these measures in the context of a second-order dominance property that is akin to generalized Lorenz dominance as introduced by Shorrocks (Economica 50:3–17, 1983) and Kakwani (Advances in econometrics, vol 3. JAI Press, Greenwich, pp 191–213, 1984). Because we consider welfare differences rather than welfare levels, the requisite equivalence result involves affine welfare functions only, as opposed to the entire class of strictly increasing and strictly S-concave welfare indicators. Thus, our measures are associated with those members of the generalized-Gini class that are strictly increasing and strictly S-concave. Moving from second-order dominance to first-order dominance does not change this result significantly: for most intents and purposes, the generalized Ginis remain the only strictly increasing and strictly S-concave measures that are equivalent to this first-order dominance condition phrased in terms of welfare change. Our final result provides a characterization of our measures of welfare change in the spirit of Weymark’s (Math Soc Sci 1:409–430, 1981) original axiomatization of the generalized Gini welfare functions. Journal of Economic Literature Classification No.: D31. © 2019, Springer-Verlag GmbH Germany, part of Springer Nature.

Social Choice and Welfare

The measurement of welfare change

We compare successive age cohorts of three broad social groups – Scheduled Castes and Tribes (SC-STs), Other Backward Classes (OBCs) and “Others” and provide the first disaggregated picture of the evolution of inter-caste disparities in India. The results show that absolute caste gaps in years of schooling and prestigious occupation of white-collar jobs have remained static, whereas log wages below the median have convergence and above the median diverged. Examining extension of job quotas to OBCs in 1993, we find positive effects of affirmative action on probability of holding government jobs, as well as on secondary schooling completion.