A Pseudo-Market Approach to Allocation with Priorities
AbstractWe 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. Aanund Hylland & Richard Zeckhauser (1979)'s position-allocation problem is a special case of our framework, and our results on incentives and fairness are also new in their classical setting.
CitationHe, Yinghua, Antonio Miralles, Marek Pycia, and Jianye Yan. 2018. "A Pseudo-Market Approach to Allocation with Priorities." American Economic Journal: Microeconomics, 10 (3): 272-314. DOI: 10.1257/mic.20150259
- D63 Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D82 Asymmetric and Private Information; Mechanism Design
- H75 State and Local Government: Health; Education; Welfare; Public Pensions
- I21 Analysis of Education
- I28 Education: Government Policy