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Welfare theorems for random assignments with priorities

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  • Schlegel, Jan Christoph
  • Mamageishvili, Akaki

Abstract

We introduce new notions of priority-constrained efficiency and provide priority-constrained versions of the ordinal efficiency welfare theorem for school choice lotteries. Moreover, we show that a priority-constrained version of a cardinal second welfare theorem fails to hold, but can be restored for a relaxed notion of equilibrium with priority-specific prices.

Suggested Citation

  • Schlegel, Jan Christoph & Mamageishvili, Akaki, 2020. "Welfare theorems for random assignments with priorities," Games and Economic Behavior, Elsevier, vol. 124(C), pages 62-81.
    • Handle: RePEc:eee:gamebe:v:124:y:2020:i:c:p:62-81
    DOI: 10.1016/j.geb.2020.08.009
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    References listed on IDEAS

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    Cited by:

    1. Miralles, Antonio & Pycia, Marek, 2021. "Foundations of pseudomarkets: Walrasian equilibria for discrete resources," Journal of Economic Theory, Elsevier, vol. 196(C).

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    More about this item

    Keywords

    Matching; Random assignments; Priority-based allocation; Constrained efficiency; Pseudo-Market;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design

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