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Improving and Balancing Task Allocation with Market Design

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  • Terence Highsmith

Abstract

In balanced task allocation, a firm allocates stochastically arriving tasks to workers. Balance requires that workers complete the same number of tasks or have equally difficult task allocations. Prominently, U.S. foster care agencies rotate allocation across workers to satisfy balance. The Rotation mechanism is highly inefficient and could contribute to poorer welfare and productivity for workers. I take a market design approach to construct the Dynamic Pseudomarket Mechanism (DPM). It satisfies the institutional balance constraint, Pareto efficiency, and approximate incentive compatibility. I develop a data-driven bound on DPM's expected productivity because DPM could increase or decrease productivity in practice. Simulation results indicate this approach can accurately predict DPM's effects with minimal data. The theoretical results underpinning the bound establish that, in large random markets, workers' welfare converges to the maximum in fractional, multi-unit Pareto efficient matchings, a finding of independent interest.

Suggested Citation

  • Terence Highsmith, 2026. "Improving and Balancing Task Allocation with Market Design," Papers 2607.23222, arXiv.org, revised Oct 2026.
    • Handle: RePEc:arx:papers:2607.23222
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    References listed on IDEAS

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    1. Yinghua He & Antonio Miralles & Marek Pycia & Jianye Yan, 2018. "A Pseudo-Market Approach to Allocation with Priorities," American Economic Journal: Microeconomics, American Economic Association, vol. 10(3), pages 272-314, August.
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