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Incentives in the probabilistic serial mechanism

  • Kojima, Fuhito
  • Manea, Mihai

The probabilistic serial mechanism (Bogomolnaia and Moulin, 2001 [9]) is ordinally efficient but not strategy-proof. We study incentives in the probabilistic serial mechanism for large assignment problems. We establish that for a fixed set of object types and an agent with a given expected utility function, if there are sufficiently many copies of each object type, then reporting ordinal preferences truthfully is a weakly dominant strategy for the agent (regardless of the number of other agents and their preferences). The non-manipulability and the ordinal efficiency of the probabilistic serial mechanism support its implementation instead of random serial dictatorship in large assignment problems.

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Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 145 (2010)
Issue (Month): 1 (January)
Pages: 106-123

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Handle: RePEc:eee:jetheo:v:145:y:2010:i:1:p:106-123
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622869

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