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Assignment problems with complementarities

Author

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  • Nguyen, Thành
  • Peivandi, Ahmad
  • Vohra, Rakesh

Abstract

The problem of allocating bundles of indivisible objects without transfers arises in many practical settings, including the assignment of courses to students, of siblings to schools, and of truckloads of food to food banks. In these settings, the complementarities in preferences are small compared with the size of the market. We exploit this to design mechanisms satisfying constrained efficiency and asymptotic strategy-proofness. We introduce two mechanisms, one for cardinal and the other for ordinal preferences. When agents do not want bundles of size larger than k, these mechanisms over-allocate each good by at most k−1 units, ex-post. These results are based on a generalization of the Birkhoff–von Neumann theorem on how probability shares of bundles can be expressed as lotteries over approximately feasible allocations, which is of independent interest.

Suggested Citation

  • Nguyen, Thành & Peivandi, Ahmad & Vohra, Rakesh, 2016. "Assignment problems with complementarities," Journal of Economic Theory, Elsevier, vol. 165(C), pages 209-241.
    • Handle: RePEc:eee:jetheo:v:165:y:2016:i:c:p:209-241
    DOI: 10.1016/j.jet.2016.04.006
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    References listed on IDEAS

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    1. repec:eee:jetheo:v:177:y:2018:i:c:p:708-733 is not listed on IDEAS

    More about this item

    Keywords

    One sided matching; Complementarities; Strategy-proof; Efficient; Envy-free; Mechanism;

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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