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Aggregate efficiency in random assignment problems

Alioğulları, Zeynel Harun and Barlo, Mehmet and Tuncay, Muhammed Alparslan (2013) Aggregate efficiency in random assignment problems. [Working Paper / Technical Report] Sabanci University ID:SU_FASS_2012/0004

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Abstract

We introduce aggregate efficiency (AE) for random assignments (RA) by requiring higher expected numbers of agents be assigned to their more preferred choices. It is shown that the realizations of any aggregate efficient random assignment (AERA) must be an AE permutation matrix. While AE implies ordinally efficiency, the reverse does not hold. And there is no mechanism treating equals equally while satisfying weak strategyproofness and AE. But, a new mechanism, the reservation-1 (R1), is identified and shown to provide an improvement on grounds of AE over the probabilistic serial mechanism of Bogomolnaia and Moulin (2001). We prove that R1 is weakly strategyproof, ordinally efficient, and weak envy--free. Moreover, the characterization of R1 displays that it is the probabilistic serial mechanism updated by a principle decreed by the Turkish parliament concerning the random assignment of new doctors: Modifying the axioms of Hasimoto, et. al. (2012) characterizing the probabilistic serial mechanism to satisfy this principle, fully characterizes R1.

Item Type:Working Paper / Technical Report
Uncontrolled Keywords:Random Assignment Problem; Aggregate E±cieny; Ordinal E±ciency; Probabilistic Serial Random Assignment Mechanism; R-1 Mechanism; Strategyproofness
Subjects:H Social Sciences > HB Economic Theory > HB135-147 Mathematical economics. Quantitative methods
H Social Sciences > HB Economic Theory
ID Code:23527
Deposited By:Mehmet Barlo
Deposited On:11 Jan 2014 11:10
Last Modified:11 Jan 2014 11:10

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