Abstract
We propose a pseudo-market mechanism for no-monetary-transfer allocation of indivisible objects based on priorities such as those in school choice. Agents are given token money, face priority-specific prices, and buy utility-maximizing random assignments. The mechanism is asymptotically incentive compatible, and the resulting assignments are fair and constrained Pareto efficient. Hylland and Zeckhauser's (1979) position-allocation problem is a special case of our framework, and our results on incentives and fairness are also new in their classical setting.
Keywords
Priority-based allocation; Efficiency; Stability; Incentive Compatibility; Pseudo-Market Approach;
JEL codes
- C78: Bargaining Theory • Matching Theory
- D82: Asymmetric and Private Information • Mechanism Design
- I29: Other
Replaced by
Yinghua He, Antonio Miralles, Marek Pycia, and Jianye Yan, “A Pseudo-Market Approach to Allocation with Priorities”, American Economic Journal: Microeconomics, vol. 10, n. 3, August 2018, pp. 272–314.
Reference
Yinghua He, Antonio Miralles, Marek Pycia, and Jianye Yan, “A Pseudo-Market Approach to Allocation with Priorities”, TSE Working Paper, n. 15-601, September 2015, revised July 2017.
See also
Published in
TSE Working Paper, n. 15-601, September 2015, revised July 2017