Winter Research Scholarship

Project title

Algorithmic Search

Project duration, hours of engagement & delivery mode

Duration of the project, 4 weeks (24 June – 19 July 2024).

Hours of engagement must be between 20 - 36hrs per week

The project can be completed under a remote working arrangement.

Description

Background:

In the recent years, firms have increasingly used algorithmic pricing to maximise their profits. The impacts of algorithmic pricing on equilibrium prices, quantities, and welfare have received considerable attention in the economics literature in the last few years. More recently, some websites have started offering consumers new AI tools to search products, prices, and even bargain deals. We refer to the use of online AI tools by consumers as algorithmic search.  

Aim:

The ultimate aim of this project is to analyse the impact of algorithmic search on equilibrium prices, quantities, and welfare.

Approach:

The approach of the project is theoretical, based on both Microeconomic Theory and Game Theory.

The student is expected to:

• Review academic economic literature on algorithmic pricing.
• Investigate how algorithmic search tools work. For instance students will study how consumers may benefit from using tools such as HAGGLE IT and Comparison.
• Outline a model/game that can be used to analyse an economy with sellers using algorithmic pricing and buyers using algorithmic search.

Preliminary readings:

Hill, Gregory “Until now, sellers have used AI to get the best deal for themselves – those tables are about to turn.” The Conversation, January 5, 2024

Johnson, Justin P., Andrew Rhodes, and Matthijs Wildenbeest. "Platform design when sellers use pricing algorithms." Econometrica 91.5 (2023): 1841-1879.

Calvano, Emilio, et al. "Artificial intelligence, algorithmic pricing, and collusion." American Economic Review 110.10 (2020): 3267-3297.

Brown, Zach Y., and Alexander MacKay. "Competition in pricing algorithms." American Economic Journal: Microeconomics 15.2 (2023): 109-156.

The students will gain experience in applications of models in game theory. Moreover, at the end of this project, students will also have a clear understanding of modelling games and rigorous techniques in game theory and microeconomics. In particular, the student is going to:  

• have a deeper understanding of the role of theoretical models,
• study welfare implications of algorithmic pricing and algorithmic search, and
• provide policy implications on the efficiency of markets where algorithmic pricing and search are prevalent.

This experience will be useful to offer the students the possibility to develop a research agenda.

Students will be asked to produce weekly reports, and a final document at the end of the project.

Students will be asked to review academic literature and attempt to write economic models.

Students will investigate how internet services support algorithmic search and how sellers use algorithmic pricing.

Suitable for

Supervisors

Dr Carlos Oyarzun

Dr Metin Uyanik

Further info

The applicants can contact Metin or Carlos via email for further information on the project.

Project title

Electoral Competition and Distribution of Public Resources

Project duration, hours of engagement & delivery mode

Duration of the project, 4 weeks (24 June – 19 July 2024).

Hours of engagement: 35 hrs per week

COVID-19 considerations: Please outline if the project can be completed under a remote working arrangement or if on-site attendance is required. 

Description

In this project, we investigate empirically how electoral competition and electoral institutions affect the behaviours of political actors, and the allocation of public expenditure in democracies.

This project may involves collecting, digitalizing, organizing, cleaning, and analyzing data. Students may gain hands-on skills in working with data, and research experience.

Suitable for

This project is open to applications from second year with basic skills in computer (e.g., Microsoft Excel, Google Sheet etc). It is suitable to students who are eager to learn and can work independently.

Supervisor

Dr Haishan Yuan

Project title

Collective Sales and Housing Market under Information Asymmetry

Project duration, hours of engagement & delivery mode

Duration of the project, 4 weeks (24 June – 19 July 2024).

Hours of engagement: Between 20 - 36hrs per week

Attendance is preferred, but the project can be completed under a remote working arrangement.  

Description

In urban settings, multi-owned properties, commonly known as stratas, dominate the housing landscape. There are around 10.9 million dwellings in Australia as of June 2022 (ABS). There are more than 3 million strata and community-titled lots (units, townhouses etc.) in Australia and

at least one-in-six Australians (%16-25 of population) now live in stratas.

Half (50%) of Australia’s strata building stock was built before the year 2000, highlighting retrofitting need.

The rise of urban renewal, coupled with population growth and migration, has intensified the need for innovative approaches to expedite strata sales. Many stratas face the challenge of aging infrastructure requiring costly repairs. To address this, legislative measures have been implemented in several Australian states, starting with New South Wales in 2016, allowing collective strata sales if a minimum of 75% of owners agree. Western Australia and the Northern Territory followed suit, adopting similar legislation based on a quota rule. In 2023, Queensland decided to implement the 75% quota rule, further highlighting the need for a comprehensive understanding of collective strata sales.

In many settings, buyers lack knowledge of the sellers' valuation of their properties, and sellers are uninformed about the value of the project to potential buyers. This information asymmetry creates challenges in negotiation processes, hindering the overall efficiency and success of strata sales.

This project aims to conduct a comprehensive study on strata sales under incomplete information. The primary focus is the formulation and analysis of a game-theoretic model suitable to study this problem. Asymmetric information and welfare implications of different legislative methods for strata sales will be considered. Specifically, the 100% agreement and quota method will be analysed, providing recommendations for policy improvements. The project also discusses fairness issues due to the new quota rule that may yield forced sales.

The students will gain skills in data collection and applications of Game Theory models. Moreover, at the end of this project, the students will also have a clear understanding of how to use Game Theory to analyse asymmetric information and  collective sales, leveraging rigorous game theory techniques and microeconomics concepts. In particular, the student is going to:  

• conduct an in-depth review of existing literature on collective sales under information asymmetry, as well as strata sale processes in Australia.
• have a deeper understanding of the role of and models under information asymmetry in game theory and their implications in strata sales. 
• study welfare implications of different legislative methods, contributing to informed policy decisions for strata sales.
• provide policy implications on the efficiency and fairness of collective strata sales through legislative improvements and market interventions.

This knowledge will be useful to offer the students the possibility to develop a research agenda.

Students will be asked to produce weekly reports, and a final document at the end of the project. Students will be asked to review literature, work with basic examples, collect data, write algorithms and read proofs when necessary.

Suitable for

Supervisors

Further info

Candidates interests in applying to the project can write to the supervisors  (m.uyanik@uq.edu.au and c.oyarzun@uq.edu.au) if they have specific inquiries about the project.