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. 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.
"A Pseudo-Market Approach to Allocation with Priorities."
American Economic Journal: Microeconomics,
Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Asymmetric and Private Information; Mechanism Design
State and Local Government: Health; Education; Welfare; Public Pensions
Analysis of Education
Education: Government Policy