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Efficiency, Justified Envy, and Incentives in Priority-Based Matching

Author

Listed:
  • Atila Abdulkadiroğlu
  • Yeon-Koo Che
  • Parag A. Pathak
  • Alvin E. Roth
  • Olivier Tercieux

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

Top trading cycles (TTC) is Pareto efficient and strategy-proof in priority-based matching, but so are other mechanisms including serial dictatorship. We show that TTC minimizes justified envy among all Pareto efficient and strategy-proof mechanisms in one-to-one matching. In many-to-one matching, TTC admits less justified envy than serial dictatorship in an average sense. Empirical evidence from New Orleans OneApp and Boston Public Schools shows that TTC has significantly less justified envy than serial dictatorship.

Suggested Citation

  • Atila Abdulkadiroğlu & Yeon-Koo Che & Parag A. Pathak & Alvin E. Roth & Olivier Tercieux, 2020. "Efficiency, Justified Envy, and Incentives in Priority-Based Matching," PSE-Ecole d'économie de Paris (Postprint) halshs-03029897, HAL.
    • Handle: RePEc:hal:pseptp:halshs-03029897
    DOI: 10.1257/aeri.20190307
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    Cited by:

    1. Ortega, Josué & Klein, Thilo, 2023. "The cost of strategy-proofness in school choice," Games and Economic Behavior, Elsevier, vol. 141(C), pages 515-528.
    2. Julien Grenet & YingHua He & Dorothea Kübler, 2022. "Preference Discovery in University Admissions: The Case for Dynamic Multioffer Mechanisms," Journal of Political Economy, University of Chicago Press, vol. 130(6), pages 1427-1476.
    3. Ata Atay & Ana Mauleon & Vincent Vannetelbosch, 2022. "Limited Farsightedness in Priority-Based Matching," Papers 2212.07427, arXiv.org.
    4. Julien Combe, 2023. "Reallocation with priorities and minimal envy mechanisms," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 76(2), pages 551-584, August.
    5. Siwei Chen & Yajing Chen & Chia‐Ling Hsu, 2023. "New axioms for top trading cycles," Bulletin of Economic Research, Wiley Blackwell, vol. 75(4), pages 1064-1077, October.
    6. Valant, Jon & Walker, Brigham, 2024. "Setting Priorities in School Choice Enrollment Systems: Who Benefits from Placement Algorithm Preferences?," IZA Discussion Papers 16776, Institute of Labor Economics (IZA).
    7. Qianfeng Tang & Yongchao Zhang, 2021. "Weak stability and Pareto efficiency in school choice," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(2), pages 533-552, March.
    8. Peter Troyan, 2022. "Non-Obvious Manipulability of the Rank-Minimizing Mechanism," Papers 2206.11359, arXiv.org.
    9. Minoru Kitahara & Yasunori Okumura, 2023. "School Choice with Multiple Priorities," Papers 2308.04780, arXiv.org, revised Oct 2023.
    10. Estelle Cantillon & Li Chen & Juan Sebastian Pereyra Barreiro, 2022. "Respecting priorities versus respecting preferences in school choice: When is there a trade-off ?," Working Papers ECARES 2022-39, ULB -- Universite Libre de Bruxelles.
    11. de Callatay, Pierre & Mauleon, Ana & Vannetelbosch, Vincent, 2021. "Minimally Farsighted Unstable Networks," LIDAM Discussion Papers CORE 2021012, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    12. Battal Dogan & Lars Ehlers, 2020. "Blocking Pairs versus Blocking Students : Stability Comparisons in School Choice," Cahiers de recherche 04-2020, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    13. Aram Grigoryan, 2023. "Top trading cycles with reordering: improving match priority in school choice," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 60(3), pages 383-396, April.
    14. Atila Abdulkadiroglu & Tommy Andersson, 2022. "School Choice," NBER Working Papers 29822, National Bureau of Economic Research, Inc.
    15. Matsui, Akihiko & Murakami, Megumi, 2022. "Deferred acceptance algorithm with retrade," Mathematical Social Sciences, Elsevier, vol. 120(C), pages 50-65.
    16. Mustafa Oguz Afacan & Umut Dur & A. Arda Gitmez & Ozgur Y{i}lmaz, 2022. "Improving the Deferred Acceptance with Minimal Compromise," Papers 2205.00032, arXiv.org, revised Sep 2023.
    17. Nick Arnosti, 2023. "Lottery Design for School Choice," Management Science, INFORMS, vol. 69(1), pages 244-259, January.
    18. Siwei Chen & Yajing Chen & Chia-Ling Hsu, 2021. "New axioms for top trading cycles," Papers 2104.09157, arXiv.org, revised Jun 2021.
    19. Mustafa Oğuz Afacan & Umut Dur, 2023. "Strategy‐proof size improvement: is it possible?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 125(2), pages 321-338, April.
    20. Peng Shi, 2022. "Optimal Priority-Based Allocation Mechanisms," Management Science, INFORMS, vol. 68(1), pages 171-188, January.

    More about this item

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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