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Welfare-Maximizing Assignment of Agents to Hierarchical Positions

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  • Isa Hafalir
  • Antonio Miralles

Abstract

We allocate agents to three kinds of hierarchical positions: top, medium, and low. No monetary transfers are allowed. We solve for the incentive-compatible (IC) mechanisms that maximize a family of weighted social welfares that includes utilitarian and Rawlsian welfares. When the market is tough (all agents bear positive risk of obtaining a low position in any IC and feasible mechanism), then the pseudomarket mechanism with equal budgets (PM) and the Boston mechanism without priorities (BM) yield identical assignments which are always optimal. Otherwise, when the market is mild, PM and BM di§er and each one implements the optimal rule under di§erent assumptions on the curvature of virtual valuations. We also establish that both BM and PM mechanisms guarantee IC Pareto-optimal assignments for a domain of preference distributions satisfying weak assumptions.

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  • Isa Hafalir & Antonio Miralles, "undated". "Welfare-Maximizing Assignment of Agents to Hierarchical Positions," GSIA Working Papers 2015-E6, Carnegie Mellon University, Tepper School of Business.
    • Handle: RePEc:cmu:gsiawp:-1137660315
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    Cited by:

    1. Antonio Miralles & Marek Pycia, 2017. "Large vs. Continuum Assignment Economies: Efficiency and Envy-Freeness," Working Papers 950, Barcelona School of Economics.
    2. Ehlers, Lars & Majumdar, Dipjyoti & Mishra, Debasis & Sen, Arunava, 2020. "Continuity and incentive compatibility in cardinal mechanisms," Journal of Mathematical Economics, Elsevier, vol. 88(C), pages 31-41.
    3. Lars EHLERS & Dipjyoti MAJUMDAR & Debasis MISHRA & Arunava SEN, 2016. "Continuity and Incentive Compatibility in Cardinal Voting Mechanisms," Cahiers de recherche 04-2016, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    4. Bloch, Francis & Dutta, Bhaskar & Dziubiński, Marcin, 2023. "Selecting a winner with external referees," Journal of Economic Theory, Elsevier, vol. 211(C).
    5. Dogan, Mustafa & Uyanik, Metin, 2020. "Welfare maximizing allocation without transfers," Economics Letters, Elsevier, vol. 195(C).
    6. Miralles, Antonio & Pycia, Marek, 2021. "Foundations of pseudomarkets: Walrasian equilibria for discrete resources," Journal of Economic Theory, Elsevier, vol. 196(C).
    7. Hatfield, John William & Kojima, Fuhito & Narita, Yusuke, 2016. "Improving schools through school choice: A market design approach," Journal of Economic Theory, Elsevier, vol. 166(C), pages 186-211.
    8. EHLERS, Lars & MAJUMDAR, Dipjyoti & MISHRA, Debasis & SEN, Arunava, 2016. "Continuity and incentive compatibility," Cahiers de recherche 2016-04, Universite de Montreal, Departement de sciences economiques.
    9. Yinghua He & Antonio Miralles & Marek Pycia & Jianye Yan, 2018. "A Pseudo-Market Approach to Allocation with Priorities," American Economic Journal: Microeconomics, American Economic Association, vol. 10(3), pages 272-314, August.

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