Incentive Compatible Allocation and Exchange of Discrete Resources
AbstractAllocation and exchange of discrete resources such as kidneys, school seats, and many other resources for which agents have single-unit demand is conducted via direct mechanisms without monetary transfers. Incentive compatibility and efficiency are primary concerns in designing such mechanisms. We show that a mechanism is indi- vidually strategy-proof and always selects the efficient outcome with respect to some Arrovian social welfare function if and only if the mechanism is group strategy-proof and Pareto efficient. We construct the full class of these mechanisms and show that each of them can be implemented by endowing agents with control rights over resources. This new class, which we call trading cycles, contains new mechanisms as well as known mechanisms such as top trading cycles, serial dictatorships, and hierarchical exchange. We illustrate how one can use our construction to show what can and what cannot be achieved in a variety of allocation and exchange problems, and we provide an example in which the new trading-cycles mechanisms strictly Lorenz dominate all previously known mechanisms.
Download InfoIf 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.
Bibliographic InfoPaper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 715.
Date of creation: 01 Jan 2009
Date of revision: 11 Mar 2014
Note: Previously circulated as "A Theory of House Allocation and Exchange Mechanisms"
Contact details of provider:
Postal: Boston College, 140 Commonwealth Avenue, Chestnut Hill MA 02467 USA
Web page: http://fmwww.bc.edu/EC/
More information through EDIRC
Mechanism design; group strategy-proofness; Pareto efficiency; matching; house allocation; house exchange; outside options;
Find related papers by JEL classification:
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-10-24 (All new papers)
- NEP-CTA-2009-10-24 (Contract Theory & Applications)
- NEP-GTH-2009-10-24 (Game Theory)
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.:
- Salvador Barbera, 1995.
"Strategy-Proof Allotment Rules,"
1142, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Barbera, S. & Gul, F. & Stacchetti, E., 1992.
"Generalized Median Voter Schemes and Committees,"
UFAE and IAE Working Papers
184.92, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Fuhito Kojima & M. Utku Ünver, 2010. "The 'Boston' School-Choice Mechanism," Boston College Working Papers in Economics 729, Boston College Department of Economics, revised 08 Oct 2010.
- Jaramillo, Paula & Manjunath, Vikram, 2012.
"The difference indifference makes in strategy-proof allocation of objects,"
Journal of Economic Theory,
Elsevier, vol. 147(5), pages 1913-1946.
- Paula Jaramillo & Vikram Manjunath, 2011. "The Difference Indifference Makes in Strategy-Proof Allocation of Objects," DOCUMENTOS CEDE 008746, UNIVERSIDAD DE LOS ANDES-CEDE.
- Sophie Bade, 2011. "Pareto-Optimal Assignments by Hierarchical Exchange," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2011_11, Max Planck Institute for Research on Collective Goods.
- Daniel Monte & Norovsambuu Tumennasan, 2012.
"Centralized Allocation in Multiple Markets,"
Economics Working Papers
2012-09, School of Economics and Management, University of Aarhus.
- Alexander Westkamp, 2013. "An analysis of the German university admissions system," Economic Theory, Springer, vol. 53(3), pages 561-589, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F Baum).
If references are entirely missing, you can add them using this form.