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Large vs. continuum assignment economies: efficiency and envy-freeness


Miralles, Antonio; Pycia, Marek (2017). Large vs. continuum assignment economies: efficiency and envy-freeness. Barcelona GSE Working Paper Series 950, Barcelona Graduate School of Economics.

Abstract

Continuum models are often used to study large finite assignment economies. However, some subtleties must be taken into account. We show that in the large finite random assignment problem without transfers, Competitive Equilibrium with vanishing income differences does not asymptotically characterize the set of efficient and envy-free random assignment profiles. This is in sharp contrast with the continuum model counterpart (Ashlagi and Shi, 2015). The problem is driven by the failure of local non-satiation inherent in no-transfer assignment.

Abstract

Continuum models are often used to study large finite assignment economies. However, some subtleties must be taken into account. We show that in the large finite random assignment problem without transfers, Competitive Equilibrium with vanishing income differences does not asymptotically characterize the set of efficient and envy-free random assignment profiles. This is in sharp contrast with the continuum model counterpart (Ashlagi and Shi, 2015). The problem is driven by the failure of local non-satiation inherent in no-transfer assignment.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:D47, D61, D63
Uncontrolled Keywords:Random assignments, efficiency, envy-freeness, convergence failure, competitiv equilibrium from equal incomes
Language:English
Date:January 2017
Deposited On:12 Jun 2018 11:12
Last Modified:31 Jul 2018 07:09
Series Name:Barcelona GSE Working Paper Series
Number of Pages:14
Additional Information:Revised version
OA Status:Green
Official URL:https://www.barcelonagse.eu/research/working-papers/large-vs-continuum-assignment-economies-efficiency-and-envy-freeness

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