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Optimal assignment mechanisms with imperfect verification

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  • Juan Pereyra

    (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

  • Francisco Silva

Abstract

Objects of different quality are to be assigned to agents. Agents can be assigned at most one object and there are not enough high-quality objects for every agent. The social planner is unable to use transfers to give incentives for agents to convey their private information; instead, she is able to imperfectly verify their reports. We characterize a mechanism that maximizes welfare, where agents face different lotteries over the various objects, depending on their report. We then apply our main result to the case of college admissions. We find that optimal mechanisms are, in general, ex-post inefficient and do strictly better than the standard mechanisms that are typically studied in the matching literature.

Suggested Citation

  • Juan Pereyra & Francisco Silva, 2020. "Optimal assignment mechanisms with imperfect verification," Documentos de Trabajo (working papers) 0420, Department of Economics - dECON.
    • Handle: RePEc:ude:wpaper:0420
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    File URL: https://hdl.handle.net/20.500.12008/25456
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    References listed on IDEAS

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    Cited by:

    1. Bloch, Francis & Dutta, Bhaskar & Dziubiński, Marcin, 2023. "Selecting a winner with external referees," Journal of Economic Theory, Elsevier, vol. 211(C).

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    More about this item

    Keywords

    imperfect verification; evidence; mechanism design; matching.;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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