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Fair solutions to the random assignment problem

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  • Christian Basteck

    () (Technische Universitaet Berlin)

Abstract

We study the problem of assigning indivisible goods to individuals where each is to receive one good. To guarantee fairness in the absence of monetary compensation, we consider random assignments that individuals evaluate according to first order stochastic dominance (sd). In particular, we find that solutions that guarantee sd-no-envy (e.g. the Probabilistic Serial) are incompatible even with the weak sd-core from equal division. Solutions on the other hand that produce assignments in the strong sd-core from equal division (e.g. Hylland and Zeckhauser’s Walrasian Equilibria from Equal Incomes) are incompatible with the strong sd-equal-division-lower-bound. As an alternative, we present a solution, based on Walrasian equilibria, that is sd-efficient, in the weak sd-core from equal division and satisfies the strong sd-equal-division-lower-bound.

Suggested Citation

  • Christian Basteck, 2016. "Fair solutions to the random assignment problem," Working Papers 2016001, Berlin Doctoral Program in Economics and Management Science (BDPEMS).
  • Handle: RePEc:bdp:wpaper:2016001
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    References listed on IDEAS

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    6. Basteck, Christian, 2018. "Fair solutions to the random assignment problem," Journal of Mathematical Economics, Elsevier, vol. 79(C), pages 163-172.
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    Cited by:

    1. Basteck, Christian, 2018. "Fair solutions to the random assignment problem," Journal of Mathematical Economics, Elsevier, vol. 79(C), pages 163-172.

    More about this item

    Keywords

    Probabilistic Serial; Sd-efficiency; Sd-envy-free; Sd-core from equal division; Sd-equal-division-lower-bound;

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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