Advanced Search
MyIDEAS: Login to save this article or follow this journal

Matching Markets With Mixed Ownership: The Case For A Real‐Life Assignment Mechanism

Contents:

Author Info

  • Pablo Guillen
  • Onur Kesten

Abstract

We consider a common indivisible good allocation problem in which agents have both social and private endowments. Popular applications include student assignment to on-campus housing, kidney exchange, and particular school choice problems. In a series of experiments Chen and Sönmez (American Economic Review 92: 1669-1686, 2002) have shown that a popular mechanism from recent theory, the Top Trading Cycles (TTC) mechanism, induces a significantly higher participation rate by agents with private endowments and leads to significantly more efficient outcomes than the most commonly used real-life mechanism, the Random Serial Dictatorship with Squatting Rights. We first show that a particular mechanism, the so-called New House 4 (NH4) mechanism, which has been in use at MIT since the 1980s, is in fact outcome-equivalent to a natural adaptation of the well-known Gale-Shapley mechanism of two-sided matching theory. This implies that the NH4 mechanism is the most efficient mechanism within the class of fair and individually rational mechanisms, and that it is essentially the only incentive compatible mechanism satisfying the two properties. We then experimentally compare NH4 and TTC. We find that under NH4, the participation rate is significantly higher than under TTC. We also propose a new efficiency test based on ordinal preference information and show that NH4 also outperforms TTC in terms of efficiency.

(This abstract was borrowed from another version of this item.)

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://hdl.handle.net/10.1111/j.1468-2354.2012.00710.x
Download Restriction: no

Bibliographic Info

Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 53 (2012)
Issue (Month): 3 (08)
Pages: 1027-1046

as in new window
Handle: RePEc:wly:iecrev:v:53:y:2012:i:3:p:1027-1046

Contact details of provider:
Postal: 160 McNeil Building, 3718 Locust Walk, Philadelphia, PA 19104-6297
Phone: (215) 898-8487
Fax: (215) 573-2057
Email:
Web page: http://www.econ.upenn.edu/ier
More information through EDIRC

Order Information:
Email:
Web: http://www.blackwellpublishing.com/subs.asp?ref=0020-6598

Related research

Keywords:

Other versions of this item:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Yan Chen & Tayfun Sönmez, 2004. "School Choice: An Experimental Study," Boston College Working Papers in Economics 622, Boston College Department of Economics.
  2. Atila Abdulkadiroğlu & Parag A. Pathak & Alvin E. Roth & Tayfun S�nmez, 2005. "The Boston Public School Match," American Economic Review, American Economic Association, vol. 95(2), pages 368-371, May.
  3. Atila Abdulkadiroglu & Tayfun Sönmez, 2003. "School Choice: A Mechanism Design Approach," American Economic Review, American Economic Association, vol. 93(3), pages 729-747, June.
  4. Abdulkadiroglu, Atila & Sonmez, Tayfun, 1999. "House Allocation with Existing Tenants," Journal of Economic Theory, Elsevier, vol. 88(2), pages 233-260, October.
  5. Yan Chen & Tayfun S�nmez, 2002. "Improving Efficiency of On-Campus Housing: An Experimental Study," American Economic Review, American Economic Association, vol. 92(5), pages 1669-1686, December.
  6. Balinski, Michel & Sonmez, Tayfun, 1999. "A Tale of Two Mechanisms: Student Placement," Journal of Economic Theory, Elsevier, vol. 84(1), pages 73-94, January.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Guillén, Pablo & Hing, Alexander, 2013. "Lying through Their Teeth: Third Party Advice and Truth Telling in a Strategy Proof Mechanism," Working Papers 2013-11, University of Sydney, School of Economics.
  2. Alexander Westkamp, 2013. "An analysis of the German university admissions system," Economic Theory, Springer, vol. 53(3), pages 561-589, August.
  3. Juan D Carrillo & Saurabh Singhal, 2011. "Tiered Housing Allocation: an Experimental Analysis," Working Paper 8511, USC Lusk Center for Real Estate.
  4. Morimitsu Kurino, 2014. "House Allocation with Overlapping Generations," American Economic Journal: Microeconomics, American Economic Association, vol. 6(1), pages 258-89, February.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wly:iecrev:v:53:y:2012:i:3:p:1027-1046. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.