Market versus Non-Market Assignment of Initial Ownership
AbstractWe study the initial assignment of ownership of a good. When the good is sold at the market-clearing price, wealthy agents may acquire it instead of poor agents who value it more highly, all else equal. Non-market assignment schemes such as random rationing may allocate the good more efficiently than the competitive market would --- if recipients of the good are allowed to resell. Schemes that favor the poor are even more desirable in that context. The ability to resell is critical to the results, but resale induces speculators to participate, so regulation of resale may be beneficial.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 6095.
Date of creation: 10 May 2006
Date of revision: 30 May 2006
Other versions of this item:
- Yeon-Koo Che & Ian Gale, 2006. "Market Versus Non-Market Assignment of Initial Ownership," Discussion Papers 0607-05, Columbia University, Department of Economics.
- D0 - Microeconomics - - General
- D2 - Microeconomics - - Production and Organizations
- D3 - Microeconomics - - Distribution
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
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