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Refugee Resettlement and Solidarity

Author

Listed:
  • José Alcalde

    (IUDESP, University of Alicante)

  • Matthias Dahm

    (School of Economics, University of Leicester)

Abstract

Refugee resettlement is one of the most important challenges of our time. We consider a set of host States required to collectively provide a given number of resettlement places. International cooperation must be voluntary, but host States can be compensated. We first show that a market approach can generate sufficient resettlement places. However, there are pervasive opportunities for manipulation. We reformulate the Ausubel (2004) auction as a procurement auction for resettlement places, but allow for the possibility that procurement costs are covered by the participants in the auction (Cramton et al., 2013). This Compensation Mechanism determines a (heterogeneous) set of transfers in exchange for resettlement places provided and allows host States to specialise in providing places or finance resettlement in other States. We show that sincere bidding is a dominant strategy and that it leads to efficient allocations of the required number of places.

Suggested Citation

  • José Alcalde & Matthias Dahm, 2025. "Refugee Resettlement and Solidarity," QM&ET Working Papers 25-01, University of Alicante, D. Quantitative Methods and Economic Theory.
    • Handle: RePEc:ris:qmetal:021526
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    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design

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