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on Economic Design |
| By: | Pablo R. Arribillaga (UNSL/CONICET); Eliana Pepa Risma (UNSL/CONICET) |
| Abstract: | In a many-to-one matching model, with or without contracts, where doctors’ preferences are private information and hospitals’ preferences are substitutable and public information, any stable matching rule could be manipulated for doctors. Since manipulations can not be completely avoided, we consider the concept of obvious manipulations and look for stable matching rules that prevent at least such manipulations (for doctors). For the model with contracts, we prove that: (i) the doctor-optimal matching rule is non-obviously manipulable and (ii) the hospital-optimal matching rule is obviously manipulable, even in the one-to-one model. In contrast to (ii), for a many-to-one model without contracts, we prove that the hospital-optimal matching rule is not obviously manipulable.Furthermore, if we focus on quantile stable rules, then we prove that the doctor-optimal matching rule is the only non-obviously manipulable quantile stable rule |
| Keywords: | obvious manipulations, matching, contracts |
| JEL: | D71 D72 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:aoz:wpaper:257&r=des |
| By: | Tetsutaro Hatakeyama (Graduate School of Economics, Keio University) |
| Abstract: | We study sequential assignment systems in which objects are assigned to agents in multiple stages. While such systems are prevalent in real-life school choice and college admissions, Dur and Kesten (2019) show that these systems are neither non-wasteful nor straightforward in general. To overcome this negative observation, we consider a model in which the mechanism designer chooses an allocation schedule, i.e., in which stage to allocate each object, as well as the allocation mechanisms it uses within a system. Our analysis newly reveals that (i) in general, no allocation schedules avoid wastefulness/non-straightforwardness and (ii) a nonwasteful/straightforward allocation schedule exists if and only if the preference domain is "tiered." This result supports practices in which the tiered domain naturally arises (e.g., Chinese college admissions practice). However, this also highlights the difficulty of sequential assignments in more diverse preference domains. |
| Keywords: | sequential assignment system, non-wastefulness, straightforwardness, tiered domain |
| JEL: | C78 D47 D61 D78 |
| Date: | 2023–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:keo:dpaper:2023-012&r=des |
| By: | Shanglyu Deng; Qiyao Zhou |
| Abstract: | Recurring auctions are ubiquitous for selling durable assets, such as land, home, or artwork: When the seller cannot sell the item in the initial auction, she often holds a subsequent auction in the near future. This paper characterizes the design of recurring auctions, both theoretically and empirically. On the theoretical side, we show that recurring auctions outperform single-round auctions in efficiency and revenue when potential buyers face costly entry. This occurs because recurring auctions allow potential buyers with different values to enter at different times, which generates savings in entry costs and increases the overall probability of sale. We further derive the optimal sequence of reserve prices in recurring auctions, depending on whether the seller aims to maximize efficiency or revenue. On the empirical side, we apply the theory to home foreclosure auctions in China, where a foreclosed home is auctioned up to three times in a row. After estimating structural parameters in a recurring auction model, we compare the observed recurring auctions to the counterfactual single-round auctions. We show that the recurring auction design leads to an annual efficiency gain of 3.40 billion USD (16.60\%) and an annual revenue gain of 2.97 billion USD (15.92\%) in China, relative to single-round auctions. Using the optimal reserve price sequences derived from our model can further improve efficiency by 0.80 billion USD (3.35\%) and revenue by 0.66 billion USD (3.06\%), respectively. |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2306.17355&r=des |
| By: | Di Feng (Faculty of Business and Economics, University of Laussane, SWITZERLAND and Junir Research Fellow, Research Institute for Economics & Business Administration (RIEB), Kobe University, JAPAN) |
| Abstract: | For Shapley-Scarf housing markets (Shapley and Scarf, 1974), Fujinaka and Wakayama (2018) propose a new incentive property, endowments-swapping-proofness, that excludes manipulations that a pair of agents can conduct before the operation of the selected mechanism by swapping their endowments. We investigate endowments-swapping-proofness for Moulin (1995)'s multiple-type housing markets, which are an extension of Shapley-Scarf housing markets with multi-unit demands. Differing from Shapley-Scarf housing markets, for multiple-type housing markets, there are various ways to swap endowments. Motivated by this observation, we introduce three extensions of endowments-swapping-proofness: bundle endowments-swapping-proofness, one type endowments-swapping-proofness, and flexible endowments-swapping-proofness. Based on the first two weaker endowments-swapping-proofness properties that we propose, and other well-studied properties (individual rationality, strategy-proofness, and non-bossiness), on several domains of preference profiles, we provide characterizations of two extensions of the top-trading-cycles (TTC) mechanism: the bundle top-trading cycles (bTTC) mechanism and the coordinatewise top-trading-cycles (cTTC) mechanism. Moreover, we also show that the strongest possible endowments-swapping-proofness property (flexible endowments-swapping-proofness) leads to an impossibility. Furthermore, our results explicitly show that our new properties correspond to efficiency notions. |
| Keywords: | Multiple-type housing markets; Endowments-swapping-proofness; Strategy proofness; Constrained efficiency; Top-trading-cycles (TTC) mechanism; Market designy |
| JEL: | C78 D61 D47 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2023-14&r=des |
| By: | Chenghong Luo; David Pérez-Castrillo; Chaoran Sun |
| Abstract: | We study the multiple-partners game (Sotomayor, 1992), the simplest many-to- many generalization of the assignment game. Our main result is that the Shapley value of a replicated multiple-partners game converges to a competitive equilibrium payoff when the number of replicas tends to infinity. Furthermore, the result also holds for a large subclass of semivalues since we prove that they converge to the same value as the replica becomes large. In the proof of our theorem, we use properties of the “multiple-partners game with types, ” where several agents are of each type. We show, in particular, that every competitive equilibrium outcome of a “large” game with types satisfies equal treatment of equals and equal treatment of partnerships. |
| Keywords: | assignment game, shapley value, replica, semivalues |
| JEL: | C78 C71 D78 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1400&r=des |