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Redistributive Allocation Mechanisms

Author

Listed:
  • Mohammad Akbarpour
  • Piotr Dworczak
  • Scott Duke Kominers

Abstract

Many scarce public resources are allocated at below-market-clearing prices and sometimes for free. Such “nonmarket” mechanisms sacrifice some surplus, yet they can potentially improve equity. We develop a model of mechanism design with redistributive concerns. Agents are characterized by a privately observed willingness to pay for quality, a publicly observed label, and a social welfare weight. A market designer controls allocation and pricing of a set of objects of heterogeneous quality and maximizes the expectation of a welfare function. The designer does not directly observe individuals’ social welfare weights. We derive structural insights about the form of the optimal mechanism, leading to a framework for determining how and when to use nonmarket mechanisms.

Suggested Citation

  • Mohammad Akbarpour & Piotr Dworczak & Scott Duke Kominers, 2024. "Redistributive Allocation Mechanisms," Journal of Political Economy, University of Chicago Press, vol. 132(6), pages 1831-1875.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/728111
    DOI: 10.1086/728111
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    Cited by:

    1. Pahle, Michael & Quemin, Simon & Osorio, Sebastian & Günther, Claudia & Pietzcker, Robert, 2025. "The emerging endgame: The EU ETS on the road towards climate neutrality," Resource and Energy Economics, Elsevier, vol. 81(C).
    2. Ostrizek, Franz & Sartori, Elia, 2023. "Screening while controlling an externality," Games and Economic Behavior, Elsevier, vol. 139(C), pages 26-55.
    3. Huesmann, Katharina & Wambach, Achim, 2025. "When money shouldn't buy," ZEW Discussion Papers 25-072, ZEW - Leibniz Centre for European Economic Research.
    4. Alejandro Corvalan, 2025. "The Distributional Consequences of Paid-Priority Queues," Papers 2512.10594, arXiv.org.
    5. Simon Finster & Patrick Loiseau & Simon Mauras & Mathieu Molina & Bary Pradelski, 2025. "Equitable Auctions," Post-Print hal-05225702, HAL.
    6. Simon Finster & Paul W. Goldberg & Edwin Lock & Matilde Tullii, 2026. "Decentralized Trading Networks: Equilibria and Fairness," Papers 2602.20868, arXiv.org.
    7. Yingkai Li & Xiaoyun Qiu, 2026. "Allocating Resources under Strategic Misrepresentation," Papers 2603.04173, arXiv.org.
    8. Brian C. Albrecht & Alex Tabarrok & Mark Whitmeyer, 2026. "Chaos and Misallocation under Price Controls," Papers 2602.12066, arXiv.org, revised Mar 2026.

    More about this item

    JEL classification:

    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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