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Efficient resource allocation under multi-unit demand

  • Kojima, Fuhito
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    We study resource allocation with multi-unit demand, such as the allocation of courses to students. In contrast to the case of single-unit demand, no stable mechanism, not even the (student-proposing) deferred acceptance algorithm, achieves desirable properties: it is not strategy-proof and the resulting allocation is not even weakly efficient under submitted preferences. We characterize the priority structure of courses over students under which stability is consistent with strategy-proofness or efficiency. We show that stability is compatible with strategy-proofness or efficiency if and only if the priority structure is essentially homogeneous. This result suggests that efficient allocation under multi-unit demand is difficult and that the use of stable mechanisms may not deliver desirable outcomes.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0899825613000870
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    Article provided by Elsevier in its journal Games and Economic Behavior.

    Volume (Year): 82 (2013)
    Issue (Month): C ()
    Pages: 1-14

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    Handle: RePEc:eee:gamebe:v:82:y:2013:i:c:p:1-14
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622836

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