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Arrovian efficiency in allocation of discrete resources


Pycia, Marek; Ünver, M Utku (2016). Arrovian efficiency in allocation of discrete resources. Boston College Working Papers in Economics 916, Boston College Department of Economics.

Abstract

Efficiency in the Pareto sense and strategy-proofness have been the central design desiderata in market design for allocation of discrete resources, such as dorm allocation, school choice, and kidney exchange. However, more precise efficiency objectives, such as welfare maximization, have been neglected. In a setting where heterogeneous indivisible
goods are being allocated without monetary transfers and each agent has a unit demand, we use Arrovian efficiency as the notion of welfare optimization and show that a mechanism is individually strategy-proof and Arrovian efficient, i.e., it always selects the best outcome with respect to some Arrovian social welfare function, if and only if the mechanism is group strategy-proof and Pareto efficient. If the Arrovian social welfare function completely ranks all matchings, then the individually strategy-proof and Arrovian-efficient mechanisms are almost sequential dictatorships.

Abstract

Efficiency in the Pareto sense and strategy-proofness have been the central design desiderata in market design for allocation of discrete resources, such as dorm allocation, school choice, and kidney exchange. However, more precise efficiency objectives, such as welfare maximization, have been neglected. In a setting where heterogeneous indivisible
goods are being allocated without monetary transfers and each agent has a unit demand, we use Arrovian efficiency as the notion of welfare optimization and show that a mechanism is individually strategy-proof and Arrovian efficient, i.e., it always selects the best outcome with respect to some Arrovian social welfare function, if and only if the mechanism is group strategy-proof and Pareto efficient. If the Arrovian social welfare function completely ranks all matchings, then the individually strategy-proof and Arrovian-efficient mechanisms are almost sequential dictatorships.

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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:C78, D78
Uncontrolled Keywords:Individual strategy-proofness, group strategy-proofness, Pareto efficiency, Arrovian preference aggregation, matching, no-transfer allocation and exchange
Language:English
Date:August 2016
Deposited On:15 Jun 2018 08:29
Last Modified:31 Jul 2018 07:11
Series Name:Boston College Working Papers in Economics
Number of Pages:24
OA Status:Green
Official URL:https://www.bc.edu/bc-web/schools/mcas/departments/economics/working-papers/archive-working-papers-801-925.html

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