nep-des New Economics Papers
on Economic Design
Issue of 2020‒09‒07
nine papers chosen by
Alex Teytelboym
University of Oxford

  1. Robust Minimal Instability of the Top Trading Cycles Mechanism By Battal Dogan; Lars Ehlers
  2. School Choice Design, Risk Aversion, and Cardinal Segregation By Calsamiglia, Caterina; Martínez-Mora, Francisco; Miralles, Antonio
  3. Matching with Compatibility Constraints: The Case of the Canadian Medical Residency Match By Muhammad Maaz; Anastasios Papanastasiou
  4. On strategy-proofness and single-peakedness:median-voting over intervals By Bettina Klaus; Panos Protopapas
  5. Learning Utilities and Equilibria in Non-Truthful Auctions By Hu Fu; Tao Lin
  7. ASSORTATIVE MATCHING CONTESTS By Chen Cohen; Ishay Rabi; Aner Sela
  9. Does Vote Trading Improve Welfare? By Alessandra Casella; Antonin Macé

  1. By: Battal Dogan (University of Bristol); Lars Ehlers (Université de Montréal and CIREQ)
    Abstract: In the context of priority-based resource allocation, we formulate methods to compare assignments in terms of their stability as binary relations (on the set of possible assignments) that depend on the preference and the priority profile. We introduce three basic properties, stability preferred, separability, and consistency, that a reasonable stability comparison should satisfy. We show that, for any stability comparison satisfying the three properties, the top trading cycles (TTC) mechanism is minimally unstable among efficient and strategy-proof mechanisms in one-to-one matching. An important consequence is the robustness of a recent result by Abdulkadiroglu et al. (2019), which uses a particular stability comparison method where an assignment is more stable than another assignment if the set of blocking pairs in the former assignment is a subset of the set of blocking pairs in the latter assignment. Our unifying approach covers basically all natural comparison methods and it includes many cardinal stability comparison methods as special cases.
    Date: 2020–03
  2. By: Calsamiglia, Caterina (IPEG); Martínez-Mora, Francisco (University of Leicester); Miralles, Antonio (University of Messina)
    Abstract: We embed the problem of public school choice design in a model of local provision of education. We define cardinal (student) segregation as that emerging when families with identical ordinal preferences submit different rankings of schools in a centralised school choice procedure. With the Boston Mechanism (BM), when higher types are less risk-averse, and there is sufficient vertical differentiation of schools, any equilibrium presents cardinal segregation. Transportation costs facilitate the emergence of cardinal segregation as does competition from private schools. Furthermore, the latter renders the best public schools more elitist. The Deferred Acceptance mechanism is resilient to cardinal segregation.
    Keywords: school choice mechanisms, cardinal segregation, segregation, peer effects, local public goods
    JEL: I21 H4 D78
    Date: 2020–07
  3. By: Muhammad Maaz; Anastasios Papanastasiou
    Abstract: The Canadian medical residency match has received considerable attention in the Canadian medical community as several students go unmatched every year. Simultaneously, several residency positions go unfilled, largely in Quebec, the Francophone province of Canada. The Canadian match is unique in that positions are designated with a language restriction, a phenomenon that has not been studied or described priorly in the matching literature. To study this phenomenon, we develop the model of matching with compatibility constraints, where based on a dual characteristic, a subset of students is incompatible with a subset of hospitals. We show that while the deferred acceptance algorithm still yields a stable matching, some desirable properties from standard two-sided matching are lost. For instance, we show that if the number of residencies exceeds the number of students, some students can yet go unmatched. We derive a lower bound for the number of English and Francophone residency positions such that every student is matched for all instances of (a form of) preferences. Our analysis suggests that to guarantee a stable match for every student, a number of positions at least equal to the population of bilingual students must be left unfilled. The model can be generalized to other instances of the stable marriage problem.
    Keywords: two-sided matching; medical residency match; CARMS
    JEL: C78 D82
    Date: 2020–08
  4. By: Bettina Klaus; Panos Protopapas
    Abstract: We study correspondences that choose an interval of alternatives when agents have single-peaked preferences over locations and ordinally extend their preferences over intervals. We extend the main results of Moulin (1980) to our setting and show that the results of Ching (1997) cannot always be similarly extended. First, strategy-proofness and peaks-onliness characterize the class of generalized median correspondences (Theorem 1). Second, this result neither holds on the domain of symmetric and single-peaked preferences, nor can in this result min/max continuity substitute peaks-onliness (see counter-Example 3). Third, strategy-proofness and voter-sovereignty characterize the class of ecient generalized median correspondences (Theorem 2).
    Keywords: correspondences; generalized median correspondences; single-peaked preferences;strategy-proofness
    JEL: C71 D63 D78 H41
    Date: 2020–07
  5. By: Hu Fu; Tao Lin
    Abstract: In non-truthful auctions, agents' utility for a strategy depends on the strategies of the opponents and also the prior distribution over their private types; the set of Bayes Nash equilibria generally has an intricate dependence on the prior. Using the First Price Auction as our main demonstrating example, we show that $\tilde O(n / \epsilon^2)$ samples from the prior with $n$ agents suffice for an algorithm to learn the interim utilities for all monotone bidding strategies. As a consequence, this number of samples suffice for learning all approximate equilibria. We give almost matching (up to polylog factors) lower bound on the sample complexity for learning utilities. We also consider settings where agents must pay a search cost to discover their own types. Drawing on a connection between this setting and the first price auction, discovered recently by Kleinberg et al. (2016), we show that $\tilde O(n / \epsilon^2)$ samples suffice for utilities and equilibria to be estimated in a near welfare-optimal descending auction in this setting. En route, we improve the sample complexity bound, recently obtained by Guo et al. (2019), for the Pandora's Box problem, which is a classical model for sequential consumer search.
    Date: 2020–07
  6. By: Chen Cohen (BGU); David Lagziel (BGU); Ofer Levi (BGU); Aner Sela (BGU)
    Keywords: All-pay contests, multiple prizes, complete information
    JEL: D44 D82 J31 J41
    Date: 2020
  7. By: Chen Cohen (BGU); Ishay Rabi (BGU); Aner Sela (BGU)
    Keywords: Two-sided matching, Tullock contest
    JEL: D44 J31 D72 D82
    Date: 2020
  8. By: Aner Sela (BGU)
    Keywords: Iatching, Tullock contest
    JEL: D44 J31 D72 D82
    Date: 2020
  9. By: Alessandra Casella (Columbia University [New York]); Antonin Macé (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: Voters have strong incentives to increase their inuence by trading votes, a practice indeed believed to be common. But is vote trading welfare-improving or welfare-decreasing? We review the theoretical literature and, when available, its related experimental tests. We begin with the analysis of logrolling { the exchange of votes for votes, considering both explicit vote exchanges and implicit vote trades engineered by bundling issues in a single bill. We then focus on vote markets, where votes can be traded against a numeraire. We cover competitive markets, strategic market games, decentralized bargaining, and more centralized mechanisms, such as quadratic voting, where votes can be bought at a quadratic cost. We conclude with procedures allowing voters to shift votes across decisions { to trade votes with oneself only { such as storable votes or a modi_ed form of quadratic voting. We _nd that vote trading and vote markets are typically ine_cient; more encouraging results are obtained by allowing voters to allocate votes across decisions.
    Keywords: logrolling,vote trading,storable votes,quadratic voting,bundling,vote markets
    Date: 2020–08

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