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Random assignments and outside options

Author

Listed:
  • Caterina Calsamiglia

    (ICREA
    IPEG)

  • Francisco Martínez-Mora

    (University of Leicester School of Business
    INARBE (Universidad Pública de Navarra))

  • Antonio Miralles

    (Università degli Studi di Messina
    Universitat Autonoma de Barcelona and Barcelona GSE)

Abstract

Most environments where assignment mechanisms (possibly random) are used are such that participants have outside options. For instance private schools and private housing are options that participants in a public choice or public housing assignment problems may have. We postulate that, in cardinal mechanisms, chances inside the assignment process could favor agents with better outside options. By imposing a robustness to outside options condition, we conclude that, on the universal domain of cardinal preferences, any mechanism must be (interim) ordinal.

Suggested Citation

  • Caterina Calsamiglia & Francisco Martínez-Mora & Antonio Miralles, 2021. "Random assignments and outside options," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 57(3), pages 557-566, October.
    • Handle: RePEc:spr:sochwe:v:57:y:2021:i:3:d:10.1007_s00355-021-01328-9
    DOI: 10.1007/s00355-021-01328-9
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    References listed on IDEAS

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    1. Yinghua He & Antonio Miralles & Marek Pycia & Jianye Yan, 2018. "A Pseudo-Market Approach to Allocation with Priorities," American Economic Journal: Microeconomics, American Economic Association, vol. 10(3), pages 272-314, August.
    2. Sandra E. Black, 1999. "Do Better Schools Matter? Parental Valuation of Elementary Education," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(2), pages 577-599.
    3. Caterina Calsamiglia & Francisco Martínez-Mora & Antonio Miralles, 2021. "School Choice Design, Risk Aversion and Cardinal Segregation," The Economic Journal, Royal Economic Society, vol. 131(635), pages 1081-1104.
    4. Dirk Bergemann & Stephen Morris, 2012. "Robust Mechanism Design," World Scientific Book Chapters, in: Robust Mechanism Design The Role of Private Information and Higher Order Beliefs, chapter 2, pages 49-96, World Scientific Publishing Co. Pte. Ltd..
    5. Atila Abdulkadiroglu & Yeon-Koo Che & Yosuke Yasuda, 2011. "Resolving Conflicting Preferences in School Choice: The "Boston Mechanism" Reconsidered," American Economic Review, American Economic Association, vol. 101(1), pages 399-410, February.
    6. Miralles, Antonio & Pycia, Marek, 2021. "Foundations of pseudomarkets: Walrasian equilibria for discrete resources," Journal of Economic Theory, Elsevier, vol. 196(C).
    7. Itai Ashlagi & Peng Shi, 2016. "Optimal Allocation Without Money: An Engineering Approach," Management Science, INFORMS, vol. 62(4), pages 1078-1097, April.
    8. Kim, Semin, 2017. "Ordinal versus cardinal voting rules: A mechanism design approach," Games and Economic Behavior, Elsevier, vol. 104(C), pages 350-371.
    9. Featherstone, Clayton R. & Niederle, Muriel, 2016. "Boston versus deferred acceptance in an interim setting: An experimental investigation," Games and Economic Behavior, Elsevier, vol. 100(C), pages 353-375.
    10. Carroll, Gabriel, 2018. "On mechanisms eliciting ordinal preferences," Theoretical Economics, Econometric Society, vol. 13(3), September.
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    Cited by:

    1. Akbarpour, Mohammad & Kapor, Adam & Neilson, Christopher & van Dijk, Winnie & Zimmerman, Seth, 2022. "Centralized School choice with unequal outside options," Journal of Public Economics, Elsevier, vol. 210(C).

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