nep-des New Economics Papers
on Economic Design
Issue of 2022‒05‒16
four papers chosen by
Guillaume Haeringer, Baruch College and Alex Teytelboym, University of Oxford

  1. Simple dominance of fixed priority top trading cycles By Pinaki Mandal
  2. Core and stability notions in many-to-one matching markets with indifferences By Agust\'in G. Bonifacio; Noelia Juarez; Pablo Neme; Jorge Oviedo
  3. Individual Rationality Conditions Identify Matching Costs in Transferable Utility Matching Games By Suguru Otani
  4. The failure of the delegation principle in a principal-agent model with transfers. By Mehdi Ayouni; Franck Bien; Thomas Lanzi

  1. By: Pinaki Mandal
    Abstract: We consider assignment problems where agents are to be assigned at most one indivisible object and monetary transfers are not allowed. We study the implementation of fixed priority top trading cycles (FPTTC) rules via simply dominant mechanisms, and provide characterizations of all such FPTTC rules. We further introduce the notion of simple strategy-proofness to resolve the issue with agents being concerned about having time-inconsistent preferences, and discuss its relation with simple dominance.
    Date: 2022–04
  2. By: Agust\'in G. Bonifacio; Noelia Juarez; Pablo Neme; Jorge Oviedo
    Abstract: In a many-to-one matchingmodel with responsive preferences in which indifferences are allowed, we study three notions of core, three notions of stability, and their relationships. We show that (i) the core contains the stable set, (ii) the strong core coincides with the strongly stable set, and (iii) the super core coincides with the super stable set. We also show how the core and the strong core in markets with indifferences relate to the stable matchings of their associated tie-breaking strict markets.
    Date: 2022–03
  3. By: Suguru Otani
    Abstract: A widely applied method for matching maximum score estimation, introduced by \cite{fox2010qe}, is founded on measuring assortativeness in a transferable utility matching game by using pairwise stable matchings. This article shows that the use of unmatched agents, transfers, and individual rationality conditions with sufficiently large penalty terms makes it possible to identify a coefficient parameter of a single common constant, that is, a common matching cost in the market.
    Date: 2022–04
  4. By: Mehdi Ayouni; Franck Bien; Thomas Lanzi
    Abstract: In a principal-agent model with monetary transfers, we show that the delegation principle always fails even if preferences are perfectly aligned. This result holds if (i) an action that is payoff-relevant for both the principal and the agent has to be taken even if the agent rejects the proposed contract and (ii) the principal can contractually extract surplus from the agent.
    Keywords: Contract; Delegation; Information; Transfers.
    JEL: D23 D82
    Date: 2022

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