IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2508.04456.html
   My bibliography  Save this paper

Screening with damages and ordeals

Author

Listed:
  • Filip Tokarski

Abstract

A welfare-maximizing designer allocates two kinds of goods using two wasteful screening instruments: ordeals, which enter agents' utilities additively, and damages, which harm agents in proportion to their values for the goods. If agents have common valuations for one of the goods, damages always lead to Pareto-dominated mechanisms: any allocation using damages can also be implemented with ordeals alone, while also leaving greater rents to inframarginal types. However, using damages can be optimal when agents' valuations for both goods are heterogeneous: with multidimensional types, the two devices differ in how they sort agents into available options, with the optimal sorting sometimes requiring the use of damages. I nevertheless identify distributional conditions under which using damages is not optimal. In those cases, the optimal mechanism produces an efficient allocation by posting "market-clearing" ordeals for each type of good.

Suggested Citation

  • Filip Tokarski, 2025. "Screening with damages and ordeals," Papers 2508.04456, arXiv.org.
    • Handle: RePEc:arx:papers:2508.04456
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2508.04456
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Daniel Waldinger, 2021. "Targeting In-Kind Transfers through Market Design: A Revealed Preference Analysis of Public Housing Allocation," American Economic Review, American Economic Association, vol. 111(8), pages 2660-2696, August.
    2. Francis Bloch & David Cantala, 2017. "Dynamic Assignment of Objects to Queuing Agents," Post-Print halshs-03968341, HAL.
    3. Barzel, Yoram, 1974. "A Theory of Rationing by Waiting," Journal of Law and Economics, University of Chicago Press, vol. 17(1), pages 73-95, April.
    4. Nick Arnosti & Peng Shi, 2020. "Design of Lotteries and Wait-Lists for Affordable Housing Allocation," Management Science, INFORMS, vol. 66(6), pages 2291-2307, June.
    5. Manasi Deshpande & Yue Li, 2019. "Who Is Screened Out? Application Costs and the Targeting of Disability Programs," American Economic Journal: Economic Policy, American Economic Association, vol. 11(4), pages 213-248, November.
    6. Henrik Jacobsen Kleven & Wojciech Kopczuk, 2011. "Transfer Program Complexity and the Take-Up of Social Benefits," American Economic Journal: Economic Policy, American Economic Association, vol. 3(1), pages 54-90, February.
    7. Nichols, Albert L & Zeckhauser, Richard J, 1982. "Targeting Transfers through Restrictions on Recipients," American Economic Review, American Economic Association, vol. 72(2), pages 372-377, May.
    8. Van Ommeren, Jos N. & Van der Vlist, Arno J., 2016. "Households' willingness to pay for public housing," Journal of Urban Economics, Elsevier, vol. 92(C), pages 91-105.
    9. Francis Bloch & David Cantala, 2017. "Dynamic Assignment of Objects to Queuing Agents," American Economic Journal: Microeconomics, American Economic Association, vol. 9(1), pages 88-122, February.
    10. Gul, Faruk & Stacchetti, Ennio, 1999. "Walrasian Equilibrium with Gross Substitutes," Journal of Economic Theory, Elsevier, vol. 87(1), pages 95-124, July.
    11. Nichols, D & Smolensky, E & Tideman, T N, 1971. "Discrimination by Waiting Time in Merit Goods," American Economic Review, American Economic Association, vol. 61(3), pages 312-323, June.
    12. Kelso, Alexander S, Jr & Crawford, Vincent P, 1982. "Job Matching, Coalition Formation, and Gross Substitutes," Econometrica, Econometric Society, vol. 50(6), pages 1483-1504, November.
    13. Jacob D. Leshno, 2022. "Dynamic Matching in Overloaded Waiting Lists," American Economic Review, American Economic Association, vol. 112(12), pages 3876-3910, December.
    14. Besley, Timothy & Coate, Stephen, 1991. "Public Provision of Private Goods and the Redistribution of Income," American Economic Review, American Economic Association, vol. 81(4), pages 979-984, September.
    15. Francis Bloch & David Cantala, 2017. "Dynamic Assignment of Objects to Queuing Agents," PSE-Ecole d'économie de Paris (Postprint) halshs-03968341, HAL.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Buurma-Olsen, Jennifer & Koster, Hans R.A. & van Ommeren, Jos & Damsté, Jort Sinninghe, 2025. "Quantifying misallocation of public housing," Journal of Public Economics, Elsevier, vol. 242(C).
    2. Mustafa Oğuz Afacan & Eray Cumbul, 2025. "Waitlist engineering in discrete object allocations with outside option," International Journal of Game Theory, Springer;Game Theory Society, vol. 54(1), pages 1-22, June.
    3. Cody Cook & Pearl Z. Li & Ariel J. Binder, 2023. "Where to Build Affordable Housing? Evaluating the Tradeoffs of Location," Working Papers 23-62, Center for Economic Studies, U.S. Census Bureau.
    4. Lei, Xiaochang, 2023. "Optimal queue to minimize waste," Mathematical Social Sciences, Elsevier, vol. 123(C), pages 87-94.
    5. Manasi Deshpande & Yue Li, 2019. "Who Is Screened Out? Application Costs and the Targeting of Disability Programs," American Economic Journal: Economic Policy, American Economic Association, vol. 11(4), pages 213-248, November.
    6. Baccara, Mariagiovanna & Lee, SangMok & Yariv, Leeat, 2023. "Task allocation and on-the-job training," Journal of Economic Theory, Elsevier, vol. 207(C).
    7. Nick Arnosti & Peng Shi, 2020. "Design of Lotteries and Wait-Lists for Affordable Housing Allocation," Management Science, INFORMS, vol. 66(6), pages 2291-2307, June.
    8. Maxey, Tyler, 2023. "Dynamic matching with transfers," Economics Letters, Elsevier, vol. 233(C).
    9. Schummer, James, 2021. "Influencing waiting lists," Journal of Economic Theory, Elsevier, vol. 195(C).
    10. Hoffmann, Bridget, 2018. "Do non-monetary prices target the poor? Evidence from a field experiment in India," Journal of Development Economics, Elsevier, vol. 133(C), pages 15-32.
    11. Cairo, Sofie & Mahlstedt, Robert, 2021. "Transparency of the Welfare System and Labor Market Outcomes of Unemployed Workers," IZA Discussion Papers 14940, Institute of Labor Economics (IZA).
    12. Cairo, Sofie & Mahlstedt, Robert, 2023. "The disparate effects of information provision: A field experiment on the work incentives of social welfare," Journal of Public Economics, Elsevier, vol. 226(C).
    13. Keith Marzilli Ericson & Timothy J. Layton & Adrianna McIntyre & Adam Sacarny, 2023. "Reducing Administrative Barriers Increases Take-up of Subsidized Health Insurance Coverage: Evidence from a Field Experiment," NBER Working Papers 30885, National Bureau of Economic Research, Inc.
    14. Abe Dunn & Joshua D Gottlieb & Adam Hale Shapiro & Daniel J Sonnenstuhl & Pietro Tebaldi, 2024. "A Denial a Day Keeps the Doctor Away," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 139(1), pages 187-233.
    15. Parry, Ian W.H., 2001. "On the Efficiency of Public and Private Health Care Systems: An Application to Alternative Health Policies in the United Kingdom," Discussion Papers 10822, Resources for the Future.
    16. Besley, Timothy & Hall, John & Preston, Ian, 1999. "The demand for private health insurance: do waiting lists matter?," Journal of Public Economics, Elsevier, vol. 72(2), pages 155-181, May.
    17. Alexeev, Michael & Leitzel, James, 2001. "Income distribution and price controls: Targeting a social safety net during economic transition," European Economic Review, Elsevier, vol. 45(9), pages 1647-1663, October.
    18. Jason B. Cook & Chloe N. East, 2023. "The Effect of Means-Tested Transfers on Work: Evidence from Quasi-Randomly Assigned SNAP Caseworkers," NBER Working Papers 31307, National Bureau of Economic Research, Inc.
    19. Colin Gray, 2018. "Why Leave Benefits on the Table? Evidence from SNAP," Upjohn Working Papers 18-288, W.E. Upjohn Institute for Employment Research.
    20. Sadoff, Sally & Samek, Anya, 2019. "The effect of recipient contribution requirements on support for social programs," Journal of Public Economics, Elsevier, vol. 169(C), pages 1-16.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2508.04456. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.