IDEAS home Printed from https://ideas.repec.org/a/gam/jecomi/v12y2024i8p211-d1460287.html
   My bibliography  Save this article

Resource Allocation with Karma Mechanisms—A Review

Author

Listed:
  • Kevin Riehl

    (Traffic Engineering Group, Institute for Transport Planning and Systems, ETH Zurich, Stefano-Franscini-Platz 5, 8093 Zurich, Switzerland)

  • Anastasios Kouvelas

    (Traffic Engineering Group, Institute for Transport Planning and Systems, ETH Zurich, Stefano-Franscini-Platz 5, 8093 Zurich, Switzerland)

  • Michail A. Makridis

    (Traffic Engineering Group, Institute for Transport Planning and Systems, ETH Zurich, Stefano-Franscini-Platz 5, 8093 Zurich, Switzerland)

Abstract

Monetary markets serve as established resource allocation mechanisms, typically achieving efficient solutions with limited information. However, they are susceptible to market failures, particularly under the presence of public goods, externalities, or inequality of economic power. Moreover, in many resource-allocating contexts, money faces social, ethical, and legal constraints. Consequently, artificial currencies and non-monetary markets are increasingly explored, with Karma emerging as a notable concept. Karma, a non-tradeable, resource-inherent currency for prosumer resources, operates on the principles of contribution and consumption of specific resources. It embodies fairness, near incentive compatibility, Pareto-efficiency, robustness to population heterogeneity, and can incentivize a reduction in resource scarcity. The literature on Karma is scattered across disciplines, varies in scope, and lacks conceptual clarity and coherence. Thus, this study undertakes a comprehensive review of the Karma mechanism, systematically comparing its resource allocation applications and elucidating overlooked mechanism design elements. Through a systematic mapping study, this review situates Karma within its literature context, offers a structured design parameter framework, and develops a road map for future research directions.

Suggested Citation

  • Kevin Riehl & Anastasios Kouvelas & Michail A. Makridis, 2024. "Resource Allocation with Karma Mechanisms—A Review," Economies, MDPI, vol. 12(8), pages 1-27, August.
    • Handle: RePEc:gam:jecomi:v:12:y:2024:i:8:p:211-:d:1460287
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7099/12/8/211/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7099/12/8/211/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Eric Budish, 2011. "The Combinatorial Assignment Problem: Approximate Competitive Equilibrium from Equal Incomes," Journal of Political Economy, University of Chicago Press, vol. 119(6), pages 1061-1103.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Erlanson, Albin & Szwagrzak, Karol, 2013. "Strategy-Proof Package Assignment," Working Papers 2013:43, Lund University, Department of Economics.
    2. Aygün, Orhan & Turhan, Bertan, 2021. "How to De-reserve Reserves," ISU General Staff Papers 202103100800001123, Iowa State University, Department of Economics.
    3. Parag A. Pathak & Alex Rees-Jones & Tayfun Sönmez, 2020. "Immigration Lottery Design: Engineered and Coincidental Consequences of H-1B Reforms," NBER Working Papers 26767, National Bureau of Economic Research, Inc.
    4. Eric Budish & Gérard P. Cachon & Judd B. Kessler & Abraham Othman, 2017. "Course Match: A Large-Scale Implementation of Approximate Competitive Equilibrium from Equal Incomes for Combinatorial Allocation," Operations Research, INFORMS, vol. 65(2), pages 314-336, April.
    5. Anna Bogomolnaia & Hervé Moulin, 2023. "Guarantees in Fair Division: General or Monotone Preferences," Mathematics of Operations Research, INFORMS, vol. 48(1), pages 160-176, February.
    6. Dur, Umut Mert & Wiseman, Thomas, 2019. "School choice with neighbors," Journal of Mathematical Economics, Elsevier, vol. 83(C), pages 101-109.
    7. Kojima, Fuhito, 2013. "Efficient resource allocation under multi-unit demand," Games and Economic Behavior, Elsevier, vol. 82(C), pages 1-14.
    8. Ortega, Josué, 2020. "Multi-unit assignment under dichotomous preferences," Mathematical Social Sciences, Elsevier, vol. 103(C), pages 15-24.
    9. Shende, Priyanka & Purohit, Manish, 2023. "Strategy-proof and envy-free mechanisms for house allocation," Journal of Economic Theory, Elsevier, vol. 213(C).
    10. Antonio Romero-Medina & Matteo Triossi, 2017. "(Group) Strategy-proofness and stability in many-to many marching markets," Documentos de Trabajo 332, Centro de Economía Aplicada, Universidad de Chile.
    11. Piotr Dworczak & Scott Duke Kominers & Mohammad Akbarpour, 2021. "Redistribution Through Markets," Econometrica, Econometric Society, vol. 89(4), pages 1665-1698, July.
    12. Budish, Eric & Reny, Philip J., 2020. "An improved bound for the Shapley–Folkman theorem," Journal of Mathematical Economics, Elsevier, vol. 89(C), pages 48-52.
    13. Hadi Hosseini, 2023. "The Fairness Fair: Bringing Human Perception into Collective Decision-Making," Papers 2312.14402, arXiv.org.
    14. Nikhil Agarwal & Eric Budish, 2021. "Market Design," NBER Working Papers 29367, National Bureau of Economic Research, Inc.
    15. Tierney, Ryan, 2019. "The problem of multiple commons: A market design approach," Games and Economic Behavior, Elsevier, vol. 114(C), pages 1-27.
    16. Jamie Tucker-Foltz & Richard Zeckhauser, 2022. "Playing Divide-and-Choose Given Uncertain Preferences," Papers 2207.03076, arXiv.org, revised Oct 2024.
    17. Jalota, Devansh & Pavone, Marco & Qi, Qi & Ye, Yinyu, 2023. "Fisher markets with linear constraints: Equilibrium properties and efficient distributed algorithms," Games and Economic Behavior, Elsevier, vol. 141(C), pages 223-260.
    18. Anna Bogomolnaia & Ron Holzman & Hervé Moulin, 2021. "Worst Case in Voting and Bargaining," Post-Print halshs-03196999, HAL.
    19. Anna Bogomolnaia & Herv'e Moulin, 2024. "Guaranteed shares of benefits and costs," Papers 2406.14198, arXiv.org, revised Nov 2024.
    20. Tayfun Sönmez & M. Bumin Yenmez, 2019. "Constitutional Implementation of Vertical and Horizontal Reservations in India: A Unified Mechanism for Civil Service Allocation and College Admissions," Boston College Working Papers in Economics 978, Boston College Department of Economics.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jecomi:v:12:y:2024:i:8:p:211-:d:1460287. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.