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The Multi-unit Assignment Problem: Theory and Evidence from Course Allocation at Harvard

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  • Eric Budish
  • Estelle Cantillon

Abstract

We use theory and field data to study the draft mechanism used to allocate courses at Harvard Business School. We show that the draft is manipulable in theory, manipulated in practice, and that these manipulations cause significant welfare loss. Nevertheless, we find that welfare is higher than under its widely studied strategyproof alternative. We identify a new link between fairness and welfare that explains why the draft performs well despite the costs of strategic behavior, and then design a new draft that reduces these costs. We draw several broader lessons for market design, regarding Pareto efficiency, fairness, and strategyproofness. (JEL D63, D82, I23)

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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 102 (2012)
Issue (Month): 5 (August)
Pages: 2237-71

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Handle: RePEc:aea:aecrev:v:102:y:2012:i:5:p:2237-71

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References

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  1. Alvin E. Roth, 2008. "What Have We Learned from Market Design?," Innovations: Technology, Governance, Globalization, MIT Press, vol. 3(1), pages 119-147, January.
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Cited by:
  1. Jens L. Hougaard & Juan D. Moreno-Ternero & Lars P. Osterdal, 2014. "Assigning agents to a line," Working Papers 14.01, Universidad Pablo de Olavide, Department of Economics.
  2. Tayfun Sönmez & Tobias B. Switzer, 2011. "Matching with (Branch-of-Choice) Contracts at United States Military Academy," Boston College Working Papers in Economics 782, Boston College Department of Economics.
  3. Mariagiovanna Baccara & Ayse Imrohoroglu & Alistair Wilson & Leeat Yariv, 2009. "A Field Study on Matching with Network Externalities," Working Papers 09-13, New York University, Leonard N. Stern School of Business, Department of Economics.
  4. Aziz, Haris & Brandt, Felix & Brill, Markus, 2013. "The computational complexity of random serial dictatorship," Economics Letters, Elsevier, vol. 121(3), pages 341-345.
  5. Wu, Binzhen & Zhong, Xiaohan, 2014. "Matching mechanisms and matching quality: Evidence from a top university in China," Games and Economic Behavior, Elsevier, vol. 84(C), pages 196-215.
  6. Tayfun S�nmez, 2013. "Bidding for Army Career Specialties: Improving the ROTC Branching Mechanism," Journal of Political Economy, University of Chicago Press, vol. 121(1), pages 186 - 219.
  7. EHLERS, Lars & WESTKAMP, Alexander, 2011. "Strategy-Proof Tie-Breaking," Cahiers de recherche 2011-07, Universite de Montreal, Departement de sciences economiques.
  8. Daniel Monte & Norovsambuu Tumennasan, 2012. "Centralized Allocation in Multiple Markets," Economics Working Papers 2012-09, School of Economics and Management, University of Aarhus.
  9. Franz Diebold & Haris Aziz & Martin Bichler & Florian Matthes & Alexander Schneider, 2014. "Course Allocation via Stable Matching," Business & Information Systems Engineering, Springer, vol. 6(2), pages 97-110, April.
  10. Kojima, Fuhito, 2013. "Efficient resource allocation under multi-unit demand," Games and Economic Behavior, Elsevier, vol. 82(C), pages 1-14.
  11. Dobzinski, Shahar & Lavi, Ron & Nisan, Noam, 2012. "Multi-unit auctions with budget limits," Games and Economic Behavior, Elsevier, vol. 74(2), pages 486-503.
  12. Chen, Ning & Li, Mengling, 2013. "Ties matter: improving efficiency in course allocation by introducing ties," MPRA Paper 47031, University Library of Munich, Germany.

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