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Inefficiency of Random Serial Dictatorship under incomplete information

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  • Akyol, Ethem

Abstract

We study the problem of allocating n objects to n agents without monetary transfers in a setting where each agent's preference over objects is private. We assume that each agent's value vector (values for n objects) is independently drawn from an exchangeable distribution and show that the celebrated Random Serial Dictatorship mechanism is welfare inferior to another allocation method, the Random Boston mechanism, when the number of agents and objects is large. Specifically, every type of every agent has a strictly higher interim expected utility under the Random Boston mechanism than under the Random Serial Dictatorship mechanism. Moreover, this strict dominance holds even at the limit.

Suggested Citation

  • Akyol, Ethem, 2023. "Inefficiency of Random Serial Dictatorship under incomplete information," Journal of Economic Theory, Elsevier, vol. 213(C).
    • Handle: RePEc:eee:jetheo:v:213:y:2023:i:c:s0022053123001370
    DOI: 10.1016/j.jet.2023.105741
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    More about this item

    Keywords

    Allocation without transfers; Bayesian incentive compatibility; Random Serial Dictatorship; Random Boston mechanism;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design

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