Deniz Selman
Assistant Professor
Department of Economics
Boğaziçi University
Natuk Birkan ~ 34342 Bebek, İstanbul, Turkey 
tel: +90.212.359.76.43
deniz.selman(at)boun.edu.tr

curriculum vitae (pdf)

 

research

teaching

cv

home

 

 

 

 

A Note on Simultaneous First-Price Auctions with Heterogeneous Bidders and Complete Information (submitted)
full text: (pdf).

ABSTRACT: Two heterogeneous bidders with commonly known preferences must choose which one of two distinct indivisible goods---a high value good and a low value good---to bid on when the goods are sold through simultaneously held first-price sealed-bid auctions. Bidders simultaneously decide (1) in which auction to participate and (2) their bid in their selected auction; hence bidders bid without knowing the number of total bidders participating in the same auction. We show that the efficiency of the equilibrium allocation depends on whether sellers can announce and commit to reserve prices before the auctions are held. When sellers cannot commit to reserve prices, there is a unique equilibrium which exhibits coordination frictions and results in a potentially inefficient allocation of the goods. When sellers can commit to reserve prices, buyers perfectly coordinate, the efficient allocation is achieved, and both allocation and payoffs are equivalent to that of the price-posting case.
JEL classification: C78, D44.

 

Political Knowledge and Voting Behavior in Turkey (joint with Melis Gülboy Laebens)
full text available upon request.

ABSTRACT: Political knowledge is an important factor in understanding voting behavior, particularly when voters' policy positions conflict with those of their favored party. In this paper, we directly estimate voters' and parties' ideological positions, as well as voters' knowledge of parties' policy positions to analyze the relationship between these estimates and the individual's voting behavior. We use a module of questions from the 2011 Turkish Election Study (TES) designed to solicit citizens' (a) opinions on a number of policy issues, (b) knowledge level of major parties' positions regarding the same issues and (c) ultimate voting behavior in the 2011 Turkish general election. We estimate the positions of voters and parties on the same ideological space using Poole and Rosenthal's (1985) spatial model. Because parties' stances on these policies are known, the survey data allow us to simultaneously estimate voters' political knowledge levels using Item Response Theory. Typically, in the empirical literature, individuals' ideological positions are taken from self-reported placement on an ideological spectrum. By treating individuals' opinions as Poole and Rosenthal treat roll-call data for U.S. legislators, we recover the underlying ideological space while avoiding the perception issues associated with self-placement. The relationship between voters' estimated ideology, estimated political knowledge and final voting decision are then investigated. In analyzing those citizens who voted for one of the four major parties---the Justice and Development Party (AKP), the Republican People's Party (CHP), the Nationalist Movement Party (MHP) and the Peace and Democracy Party (BDP)---we show that for many voters there is in fact a conflict between their ideological positions and those of their favored party, and that political knowledge level explains helps to explain this discrepancy, similar to that revealed in the U.S. (Harvill and Selman (2010)).
JEL classification: C13, D72, D82, D83.

 

Simultaneous Auctions with Private and Common Values (joint with Deniz Nemli)
full text available upon request.

ABSTRACT: We analyze two simultaneous sealed-bid auctions in which n bidders have private values for the good in one auction and a publicly known common value for the good in the other, and must choose to participate in at most one auction. The seller in each auction announces whether his good is sold via a first-price or second-price auction. After auction types are announced, bidders simultaneously decide (1) in which auction to participate and (2) their bid in their selected auction; hence bidders bid without knowing the number of other bidders participating in the same auction. Bidders choose auctions according to a cut-off strategy: only those with a sufficiently high private value choose the private auction. We fix announced auction types and bidders' cut-off strategies and characterize optimal bidding behavior, before endogenizing cut-off strategies to find the bidder equilibria. For each auction type profile, we characterize the unique symmetric bidder equilibrium for the general case and all equilibria for the case with two bidders. Bidders' cut-off values are the same across all auction type profiles in the symmetric equilibria, while asymmetric equilibria in the two bidder case vary by auction type profile. In solving for the market equilibrium, we find that revenue equivalence holds in both auctions when bidders play symmetric auction choice strategies, but does not necessarily hold in asymmetric bidder equilibria.
JEL classification: C78, D44.

 

Optimal Sequencing of Presidential Primaries
full text: (pdf).

ABSTRACT: The American presidential nomination process consists of a series of elections (primaries) in which states vote at different times. This paper focuses on the problem faced by a political party which wants to choose the optimal temporal structure for its primaries. I consider an environment in which a sequential election may generate voter herding, and address both when and how the party can benefit from social learning to maximize the probability of selecting the highest quality candidate. By choosing whether to have a sequential election and---if so---the actual sequence in which states vote, the party can control whether momentum effects will be present and guarantee that any voter herding will be ex ante beneficial to the goal of selecting the highest quality candidate. When candidates are expected to have equal partisan support, simultaneous voting outperforms all sequential elections. When one candidate has more partisan support, a sequential election can outperform simultaneous voting; under this condition, voter herding compensates for the partisan imbalance. This result is a novel example of a beneficial information cascade, in contrast with the socially inefficient cascades in the standard herding literature. In a sequential election, it is optimal for the states voting early in the primary season to be those which: (i) are smaller, (ii) have fewer partisans, (iii) have more informed voters, and (iv) display more voter diversity.
JEL classification: D71, D72, D82, D83.

 

Political Knowledge and the 2004 Presidential Election (joint with Eleanor L. Harvill)
full text: (pdf).

ABSTRACT: Political knowledge is an important factor in understanding voting behavior, particularly when voters' policy positions conflict with those of their favored candidate. In this paper, we use the National Annenberg Election Survey (NAES) for the 2004 U.S. election to directly estimate voters' ideological positions, candidates' ideological positions, and voters' knowledge of candidates' ideological positions. We then analyze the relationship between these estimates and the individual's vote in the 2004 presidential election. The NAES asks voters for their own stances and for the candidates' stances on specific policy issues. Because candidates' stances on these policies are known, the data allow us to (1) estimate voters' knowledge levels using item response theory, and (2) simultaneously estimate the positions of voters and candidates on the same spectrum. Typically, in the empirical literature, individuals' ideological positions are taken from self-reported placement on an ideological spectrum. Here, we use Poole and Rosenthal's (1985, 2000) spatial model to estimate ideological positions, treating individuals' opinions as Poole and Rosenthal treat roll-call data for legislators. This method recovers the underlying ideological space while avoiding the perception issues associated with self-placement. Assuming that voters prefer to vote for the candidate whose ideological position is closer to their own, we find that more knowledgeable individuals are far less likely to vote for the candidate farther from them. Moreover, significantly more voters vote "mistakenly" for Bush than for Kerry. Though a majority of voters have ideological positions closer to Kerry, Bush receives more votes due to this pattern of mistakes.
JEL classification: C13, D72, D82, D83.

 

Books or Tools?: Job Market Signaling with a Vocational Training Option (joint with Sümeyra Akın)

ABSTRACT: We consider a continuum of workers who can choose between an academic education—which is useful only for signaling innate ability—and vocational training through which they can acquire job skills. The cost of an academic education is decreasing in innate ability (as in Spence), while the cost of vocational training is normalized to zero. After all workers and firms observe workers' education choices, a job application game is played in which workers apply to a job in one of two labor sectors: a capacity constrained primary sector (in which expected worker productivity—and hence equilibrium wages—depend on expected innate ability) and an unconstrained secondary sector in which productivity depends on vocational skills. We find a unique market equilibrium which consists of two partial equilibrium components: a unique cut-off strategy education choice equilibrium (in which only workers with high innate ability choose an academic education) and a unique job application equilibrium. Our model predicts ex-post unemployment when the primary sector is significantly capacity constrained despite all workers having the (ex-ante) guarantee of acquiring a secondary sector job. The fraction of workers who choose the academic option is weakly decreasing in the skill level acquired through a vocational education. However, we find that the effect of the capacity in the primary sector has a non-monotonic effect on the fraction of workers who choose the academic option.
JEL classification: D82, I23, J21, J24.