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A new ex-ante efficiency criterion and implications for the probabilistic serial mechanism

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  • Doğan, Battal
  • Doğan, Serhat
  • Yıldız, Kemal

Abstract

We introduce and analyze an efficiency criterion for probabilistic assignment of objects, when only ordinal preference information is available. This efficiency criterion is based on the following domination relation: a probabilistic assignment dominates another assignment if it is ex-ante efficient for a strictly larger set of utility profiles consistent with the ordinal preferences. We provide a simple characterization of this domination relation. We revisit an extensively studied assignment mechanism, the Probabilistic Serial mechanism (Bogomolnaia and Moulin, 2001), which always chooses a “fair” assignment. We show that the Probabilistic Serial assignment may be dominated by another fair assignment. We provide conditions under which the serial assignment is undominated among fair assignments.

Suggested Citation

  • Doğan, Battal & Doğan, Serhat & Yıldız, Kemal, 2018. "A new ex-ante efficiency criterion and implications for the probabilistic serial mechanism," Journal of Economic Theory, Elsevier, vol. 175(C), pages 178-200.
    • Handle: RePEc:eee:jetheo:v:175:y:2018:i:c:p:178-200
    DOI: 10.1016/j.jet.2018.01.011
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    References listed on IDEAS

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    1. Sato, Shin, 2013. "A sufficient condition for the equivalence of strategy-proofness and nonmanipulability by preferences adjacent to the sincere one," Journal of Economic Theory, Elsevier, vol. 148(1), pages 259-278.
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    4. Bogomolnaia, Anna & Moulin, Herve, 2001. "A New Solution to the Random Assignment Problem," Journal of Economic Theory, Elsevier, vol. 100(2), pages 295-328, October.
    5. Hashimoto, Tadashi & Hirata, Daisuke & Kesten, Onur & Kurino, Morimitsu & Unver, Utku, 2014. "Two axiomatic approaches to the probabilistic serial mechanism," Theoretical Economics, Econometric Society, vol. 9(1), January.
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    Cited by:

    1. Haris Aziz, 2017. "Characterizing SW-Efficiency in the Social Choice Domain," Economics Bulletin, AccessEcon, vol. 37(1), pages 48-51.
    2. William Thomson, 2018. "On the terminology of economic design: a critical assessment and some proposals," Review of Economic Design, Springer;Society for Economic Design, vol. 22(1), pages 67-99, June.
    3. Ping Zhan, 2023. "A Simple Characterization of Assignment Mechanisms on Set Constraints," SN Operations Research Forum, Springer, vol. 4(2), pages 1-15, June.
    4. Yoshio Sano & Ping Zhan, 2021. "Extended Random Assignment Mechanisms on a Family of Good Sets," SN Operations Research Forum, Springer, vol. 2(4), pages 1-30, December.

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    More about this item

    Keywords

    Ex-ante efficiency; Probabilistic assignment; Fairness; Probabilistic serial mechanism;
    All these keywords.

    JEL classification:

    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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