IDEAS home Printed from https://ideas.repec.org/p/zbw/zewdip/313007.html
   My bibliography  Save this paper

Bidding for subsidies with one's patience

Author

Listed:
  • Caspari, Gian

Abstract

We study the problem of distributing subsidies in a market that includes both marginal individuals in need of assistance and infra-marginal individuals who would purchase the subsidized product without additional incentives. We propose the use of a wait time auction, where individuals bid the amount of time they are willing to wait in exchange for a specified subsidy amount. This design enables more direct targeting of marginal individuals, thereby enhancing the overall effectiveness of the subsidy program. Furthermore, screening is costless in equilibrium as no wait times are imposed, and practical robustness against deviations from equilibrium behavior can be ensured by implementing a maximum allowable bid.

Suggested Citation

  • Caspari, Gian, 2025. "Bidding for subsidies with one's patience," ZEW Discussion Papers 25-009, ZEW - Leibniz Centre for European Economic Research.
  • Handle: RePEc:zbw:zewdip:313007
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/313007/1/191917754X.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. John William Hatfield & Paul R. Milgrom, 2005. "Matching with Contracts," American Economic Review, American Economic Association, vol. 95(4), pages 913-935, September.
    2. Meredith Fowlie & Michael Greenstone & Catherine Wolfram, 2018. "Do Energy Efficiency Investments Deliver? Evidence from the Weatherization Assistance Program," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(3), pages 1597-1644.
    3. Hatfield, John William & Kojima, Fuhito, 2010. "Substitutes and stability for matching with contracts," Journal of Economic Theory, Elsevier, vol. 145(5), pages 1704-1723, September.
    4. Akerlof, George A., 2005. "Explorations in Pragmatic Economics," OUP Catalogue, Oxford University Press, number 9780199253913, Decembrie.
    5. Kenneth Gillingham & Amelia Keyes & Karen Palmer, 2018. "Advances in Evaluating Energy Efficiency Policies and Programs," Annual Review of Resource Economics, Annual Reviews, vol. 10(1), pages 511-532, October.
    6. Zeckhauser, Richard, 2021. "Strategic sorting: the role of ordeals in health care," Economics and Philosophy, Cambridge University Press, vol. 37(1), pages 64-81, March.
    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. Aygün, Orhan & Turhan, Bertan, 2021. "How to De-reserve Reserves," ISU General Staff Papers 202103100800001123, Iowa State University, Department of Economics.
    2. Trotta, Gianluca, 2020. "Assessing energy efficiency improvements and related energy security and climate benefits in Finland: An ex post multi-sectoral decomposition analysis," Energy Economics, Elsevier, vol. 86(C).
    3. Echenique, Federico & Galichon, Alfred, 2017. "Ordinal and cardinal solution concepts for two-sided matching," Games and Economic Behavior, Elsevier, vol. 101(C), pages 63-77.
    4. Benjamin Tello, 2022. "Stability and Contractual Efficiency in Matching with Contracts and Lexicographic Preferences," Economics Bulletin, AccessEcon, vol. 42(1), pages 41-48.
    5. Bando, Keisuke & Kawasaki, Ryo, 2024. "Stability and substitutability in multi-period matching markets," Games and Economic Behavior, Elsevier, vol. 147(C), pages 533-553.
    6. Joshua Blonz, 2019. "The Welfare Costs of Misaligned Incentives: Energy Inefficiency and the Principal-Agent Problem," Finance and Economics Discussion Series 2019-071, Board of Governors of the Federal Reserve System (U.S.).
    7. Hatfield, John William & Kominers, Scott Duke, 2017. "Contract design and stability in many-to-many matching," Games and Economic Behavior, Elsevier, vol. 101(C), pages 78-97.
    8. Antonio Romero-Medina & Matteo Triossi, 2023. "Take-it-or-leave-it contracts in many-to-many matching markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 75(2), pages 591-623, February.
    9. Federico Echenique, 2012. "Contracts versus Salaries in Matching," American Economic Review, American Economic Association, vol. 102(1), pages 594-601, February.
    10. Avataneo, Michelle & Turhan, Bertan, 2021. "Slot-specific priorities with capacity transfers," Games and Economic Behavior, Elsevier, vol. 129(C), pages 536-548.
    11. Hafalir, Isa E. & Kojima, Fuhito & Yenmez, M. Bumin, 2022. "Interdistrict school choice: A theory of student assignment," Journal of Economic Theory, Elsevier, vol. 201(C).
    12. Yannai A. Gonczarowski & Lior Kovalio & Noam Nisan & Assaf Romm, 2019. "Matching for the Israeli "Mechinot" Gap-Year Programs: Handling Rich Diversity Requirements," Papers 1905.00364, arXiv.org, revised Aug 2020.
    13. Tello, Benjamín, 2023. "Restricted complementarity and paths to stability in matching with couples," Mathematical Social Sciences, Elsevier, vol. 126(C), pages 60-67.
    14. Klijn, Flip & Yazıcı, Ayşe, 2014. "A many-to-many ‘rural hospital theorem’," Journal of Mathematical Economics, Elsevier, vol. 54(C), pages 63-73.
    15. Zhang, Jun, 2016. "On sufficient conditions for the existence of stable matchings with contracts," Economics Letters, Elsevier, vol. 145(C), pages 230-234.
    16. Bó, Inácio & Hakimov, Rustamdjan, 2022. "The iterative deferred acceptance mechanism," Games and Economic Behavior, Elsevier, vol. 135(C), pages 411-433.
    17. Aygün, Orhan & Turhan, Bertan, 2019. "Matching with Generalized Lexicographic Choice Rules," ISU General Staff Papers 20191101070000, Iowa State University, Department of Economics.
    18. Jinpeng Ma & Qiongling Li, 2016. "Convergence of price processes under two dynamic double auctions," The Journal of Mechanism and Institution Design, Society for the Promotion of Mechanism and Institution Design, University of York, vol. 1(1), pages 1-44, December.
    19. Yenmez, M. Bumin, 2018. "A college admissions clearinghouse," Journal of Economic Theory, Elsevier, vol. 176(C), pages 859-885.
    20. Kasuya, Yusuke, 2021. "Unilateral substitutability is necessary for doctor-optimal stability," Economics Letters, Elsevier, vol. 207(C).

    More about this item

    Keywords

    Subsidies; Market Design; Auctions;
    All these keywords.

    JEL classification:

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

    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:zbw:zewdip:313007. 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zemande.html .

    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.