John O. Ledyard

Allen and Lenabelle Davis Professor of Economics and Social Sciences
Fellow of the Econometric Society, 1977
Fellow of the American Academy of Arts and Sciences, 1999

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Research interests

Theory, incentive compatible mechanism design, electoral models with incomplete information, public management (Space Exploration), auction theory.

Research Statement

My research covers two areas: using markets to solve problems and improving public sector decisions.

I am working on two applications oriented projects. One, with Mani Chandy, Richard Murray (both in Engineering), is exploring the use of distributed markets to improve the robustness of electricity networks. The other project involves the use of markets to access and aggregate information. This area, called information markets, was pioneered by Caltech people and is particularly active today, with broad interest from many corporations. Applications involve very thin markets. Standard designs (electronic trading systems) do not produce reliable results so new market designs are necessary.

In more basic research, I am continuing my study of combinatorial markets - markets in which bids and offers can be made with contingencies. Such systems will be very important for complex trading situations such as derivatives trading, information markets, and supply chain trading where a range of individual contracts must be simultaneously traded to accomplish the goals of the trader. Brokers and other agents now orchestrate this; we can show that correctly designed combinatorial markets will be more efficient.

Finally, I am particularly interested in identifying why voting is such a ubiquitous process for making public decisions and whether there is any way to improve on that process. I have made significant discoveries for large electorates where voting appears to be a near-optimal mechanism. I am now turning to the analysis of smaller groups. I am also involved in applying this work to NASA space science decisions.

Publications

Optimal allocation of public goods: a solution to the `free rider' problem, with T. Groves. Econometrica 45 (1977): 783--809.

The pure theory of large two candidate elections. Public Choice 44 (1984): 7--41.

The scope of the hypothesis of Bayesian equilibrium. Journal of Economic Theory 39 (1986): 59--82.

A new and improved design for multi-object iterative auctions, with C. DeMartini, A. Kwasnica and D. Porter. Social Science Working Paper No. 1054, November 1998, revised March 1999.