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Efficient lottery design

Author

Listed:
  • Kesten, Onur
  • Kurino, Morimitsu
  • Nesterov, Alexander

Abstract

There has been a surge of interest in stochastic assignment mechanisms which proved to be theoretically compelling thanks to their prominent welfare properties. Contrary to stochastic mechanisms, however, lottery mechanisms are commonly used for indivisible good allocation in real-life. To help facilitate the design of practical lottery mechanisms, we provide new tools for obtaining stochastic improvements in lotteries. As applications, we propose lottery mechanisms that improve upon the widely-used random serial dictatorship mechanism and a lottery representation of its competitor, the probabilistic serial mechanism. The tools we provide here can be useful in developing welfare-enhanced new lottery mechanisms for practical applications such as school choice.

Suggested Citation

  • Kesten, Onur & Kurino, Morimitsu & Nesterov, Alexander, 2015. "Efficient lottery design," Discussion Papers, Research Unit: Market Behavior SP II 2015-203, WZB Berlin Social Science Center.
    • Handle: RePEc:zbw:wzbmbh:spii2015203
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    References listed on IDEAS

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    Cited by:

    1. Demeulemeester, Tom & Goossens, Dries & Hermans, Ben & Leus, Roel, 2023. "A pessimist’s approach to one-sided matching," European Journal of Operational Research, Elsevier, vol. 305(3), pages 1087-1099.
    2. Harless, Patrick, 2019. "Efficient rules for probabilistic assignment," Journal of Mathematical Economics, Elsevier, vol. 84(C), pages 107-116.
    3. Basteck, Christian, 2018. "Fair solutions to the random assignment problem," Journal of Mathematical Economics, Elsevier, vol. 79(C), pages 163-172.

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    More about this item

    Keywords

    lottery; ex post efficiency; sd-efficiency; random serial dictatorship;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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