nep-des New Economics Papers
on Economic Design
Issue of 2018‒04‒16
six papers chosen by
Guillaume Haeringer, Baruch College and Alex Teytelboym, University of Oxford

  1. Welfare theorems for random assignments with priorities By Schlegel, J. C.
  2. Mechanisms in a digitalized world By Gabrielle Demange
  3. Weak fairness and the Shapley value By Calleja, Pere; Llerena Garrés, Francesc
  4. Decentralized bargaining in matching markets: efficient stationary equilibria and the core By Elliott, Matt; Nava, Francesco
  5. Quels étudiants pour quelles universités ? Analyses empiriques de mécanismes d'allocation centralisée By Magnac, Thierry
  6. Identification in One-to-One Matching Models with Nonparametric Unobservables By Sinha, Shruti

  1. By: Schlegel, J. C.
    Abstract: Motivated by the application of designing fair and efficient school choice lotteries, we consider constrained efficiency notions for random assignments under priorities. We provide a constrained (priority respecting) version of the ordinal efficiency welfare theorem for random assignments. Moreover, we show that a constrained version of a cardinal second welfare theorem fails to hold.
    Keywords: Matching; Random Assignments; Priority-based Allocation; Constrained Efficiency; Pseudo-Market
    Date: 2017
  2. By: Gabrielle Demange (PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Due to computing and communication facilities, formal procedures, often referred to as 'al-gorithms', are now extensively used in public, economic and social areas. These procedures, currently at the forefront of criticisms, share some features with mechanisms as defined by economists, following Hurwicz. My aim is to investigate these relationships and to discuss the risks due to the power of algorithms.
    Keywords: mechanisms, algorithms, algorithmic pricing and trading, social choice rule, data,Admission post-bac APB,JEL codes: D44, D47, D71, D82
    Date: 2018
  3. By: Calleja, Pere; Llerena Garrés, Francesc
    Abstract: The Shapley value (Shapley, 1953) has been axiomatically characterized from different points of view. Van den Brink (2001) proposes a characterization by means of efficiency, fairness and the null player property. In this paper, we characterize the family of single-valued solutions obtained by relaxing fairness into weak fairness. To point out the Shapley value, we impose the additional axiom of weak self consistency and strengthen the null player property into the dummy player property.
    Keywords: Jocs cooperatius (Matemàtica), 33 - Economia,
    Date: 2018
  4. By: Elliott, Matt; Nava, Francesco
    Abstract: This paper studies market clearing in matching markets. The model is non-cooperative, fully decentralized, and in Markov strategies. Workers and firms bargain with each other to determine who will be matched to whom and at what terms of trade. Once a worker firm pair reach agreement they exit the market. Alternative possible matches affect agents' bargaining positions. We ask when do such markets clear efficiently and find that inefficiencies { mismatch and delay { often feature. Mismatch occurs whenever an agent's bargaining position is at risk of deteriorating. Delay occurs whenever agents expect their bargaining position to improve. Delay can be extensive and structured with vertically differentiated markets endogenously clearing from the top down.
    JEL: J1
    Date: 2018–02–08
  5. By: Magnac, Thierry
    Keywords: Education; matching; mechanism design; applied econometrics
    JEL: D82 I21
    Date: 2018–03–16
  6. By: Sinha, Shruti
    Abstract: This paper considers a one-to-one matching model with transferable utilities, in two-sided markets. In the model, the agents have preferences over some observable agent characteristics (called types) on the other side of the market. There are other observed characteristics aggregated at the level of types that determine the systematic preferences over these types. These systematic preferences enter the agent utilities in the form of a linear index. Agents also have idiosyncratic taste shocks. This paper shows the identification of systematic preference parameters over types, without making any parametric assumptions on the distribution of the unobserved taste shocks. The matching model reduces to two separate discrete-choice problems linked together by market clearing conditions, satisfied in the presence of equilibrium transfers. However, transfers are endogenous and unobserved which makes the discrete-choice problem non-standard. This paper gives conditions under which transfers are simply functions of the linear indices. This insight along with variation across i.i.d. markets is used to reduce the matching model to a semiparametric multi-index model with an unknown link function. Identification is shown under appropriate exclusion restrictions on the regressors.
    Keywords: One-to-One Matching; Transfers; Identification
    JEL: C31 C78 J12
    Date: 2018–03

This nep-des issue is ©2018 by Guillaume Haeringer and Alex Teytelboym. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.