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Quota Mechanisms: Finite-Sample Optimality and Robustness

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  • Ian Ball
  • Deniz Kattwinkel

Abstract

A quota mechanism links together multiple decisions by imposing a quota across decisions. We analyze the performance of quota mechanisms when the number of linked decisions is finite and the designer has imperfect knowledge of the type distribution; previously, only asymptotic results were known. Using a new optimal transport approach, we derive an ex-post decision error guarantee for quota mechanisms. This guarantee cannot be improved by any mechanisms without transfers. We quantify the sensitivity of quota mechanisms to errors in the designer's estimate of the type distribution. Finally, we show that quotas are robust to agents' beliefs about each other.

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  • Ian Ball & Deniz Kattwinkel, 2023. "Quota Mechanisms: Finite-Sample Optimality and Robustness," Papers 2309.07363, arXiv.org, revised Oct 2024.
    • Handle: RePEc:arx:papers:2309.07363
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    File URL: http://arxiv.org/pdf/2309.07363
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