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Who Cares More? Allocation with Diverse Preference Intensities

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  • Yariv, Leeat
  • Ortoleva, Pietro
  • Safonov, Evgenii

Abstract

Goods and services---public housing, medical appointments, schools---are often allocated to individuals who rank them similarly but differ in their preference intensities. We characterize optimal allocation rules when individual preferences are known and when they are not. Several insights emerge. First-best allocations may involve assigning some agents "lotteries" between high- and low-ranked goods. When preference intensities are private information, second-best allocations always involve such lotteries and, crucially, may coincide with first-best allocations. Furthermore, second-best allocations may entail disposal of services. We discuss a market-based alternative and show how it differs.

Suggested Citation

  • Yariv, Leeat & Ortoleva, Pietro & Safonov, Evgenii, 2021. "Who Cares More? Allocation with Diverse Preference Intensities," CEPR Discussion Papers 16491, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:16491
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    Cited by:

    1. Carlos Alós-Ferrer & Michele Garagnani, 2022. "Who likes it more? Using response times to elicit group preferences in surveys," ECON - Working Papers 422, Department of Economics - University of Zurich.
    2. Pereyra, Juan Sebastián & Silva, Francisco, 2023. "Optimal assignment mechanisms with imperfect verification," Theoretical Economics, Econometric Society, vol. 18(2), May.
    3. Baccara, Mariagiovanna & Lee, SangMok & Yariv, Leeat, 2023. "Task allocation and on-the-job training," Journal of Economic Theory, Elsevier, vol. 207(C).
    4. Carlos Alos Ferrer & Michele Garagnani, 2025. "Who Likes It More?," Working Papers 424225030, Lancaster University Management School, Economics Department.

    More about this item

    Keywords

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    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design

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