IDEAS home Printed from https://ideas.repec.org/p/bge/wpaper/1149.html
   My bibliography  Save this paper

Constrained Pseudo-Market Equilibrium

Author

Listed:
  • Federico Echenique
  • Antonio Miralles
  • Jun Zhang

Abstract

We propose a market solution to the problem of resource allocation subject to quantitative constraints, such as those imposed by considerations of diversity or geographical distribution. Constraints are "priced," and agents are charged to the extent that their purchases a ect the value (at equilibrium prices) of the relevant constraints. The result is a constrained-efficient market equilibrium outcome. The outcome is fair whenever the constraints do not single out individual agents, which happens, for example with geographical distribution constraints. In economies with endowments, moreover, our equilibrium outcomes are constrained efficient and approximately individually rational.

Suggested Citation

  • Federico Echenique & Antonio Miralles & Jun Zhang, 2020. "Constrained Pseudo-Market Equilibrium," Working Papers 1149, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:1149
    as

    Download full text from publisher

    File URL: https://www.barcelonagse.eu/sites/default/files/working_paper_pdfs/1149.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. He, Yinghua & Li, Sanxi & Yan, Jianye, 2015. "Evaluating assignment without transfers: A market perspective," Economics Letters, Elsevier, vol. 133(C), pages 40-44.
    2. Andreu Mas-Colell, 1992. "Equilibrium Theory with Possibly Satiated Preferences," Palgrave Macmillan Books, in: Mukul Majumdar (ed.), Equilibrium and Dynamics, chapter 9, pages 201-213, Palgrave Macmillan.
    3. Federico Echenique & M. Bumin Yenmez, 2015. "How to Control Controlled School Choice," American Economic Review, American Economic Association, vol. 105(8), pages 2679-2694, August.
    4. Ehlers, Lars & Hafalir, Isa E. & Yenmez, M. Bumin & Yildirim, Muhammed A., 2014. "School choice with controlled choice constraints: Hard bounds versus soft bounds," Journal of Economic Theory, Elsevier, vol. 153(C), pages 648-683.
    5. Alexander Westkamp, 2013. "An analysis of the German university admissions system," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 53(3), pages 561-589, August.
    6. Eric Budish & Yeon-Koo Che & Fuhito Kojima & Paul Milgrom, 2013. "Designing Random Allocation Mechanisms: Theory and Applications," American Economic Review, American Economic Association, vol. 103(2), pages 585-623, April.
    7. Phuong Le, 2017. "Competitive equilibrium in the random assignment problem," International Journal of Economic Theory, The International Society for Economic Theory, vol. 13(4), pages 369-385, December.
    8. 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.
    9. Yuichiro Kamada & Fuhito Kojima, 2015. "Efficient Matching under Distributional Constraints: Theory and Applications," American Economic Review, American Economic Association, vol. 105(1), pages 67-99, January.
    10. 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)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aygün, Orhan & Turhan, Bertan, 2021. "How to De-reserve Reserves," ISU General Staff Papers 202103100800001123, Iowa State University, Department of Economics.
    2. Echenique, Federico & Miralles, Antonio & Zhang, Jun, 2023. "Balanced equilibrium in pseudo-markets with endowments," Games and Economic Behavior, Elsevier, vol. 141(C), pages 428-443.
    3. Orhan Aygün & Bertan Turhan, 2023. "How to De-Reserve Reserves: Admissions to Technical Colleges in India," Management Science, INFORMS, vol. 69(10), pages 6147-6164, October.
    4. Aygün, Orhan & Turhan, Bertan, 2021. "How to De-reserve Reserves," ISU General Staff Papers 202104130700001123, Iowa State University, Department of Economics.
    5. Aziz, Haris & Brandl, Florian, 2022. "The vigilant eating rule: A general approach for probabilistic economic design with constraints," Games and Economic Behavior, Elsevier, vol. 135(C), pages 168-187.
    6. Balbuzanov, Ivan, 2022. "Constrained random matching," Journal of Economic Theory, Elsevier, vol. 203(C).
    7. Xiang Han & Onur Kesten & M. Utku Ünver, 2021. "Blood Allocation with Replacement Donors: A Theory of Multi-unit Exchange with Compatibility-based Preferences," Boston College Working Papers in Economics 1038, Boston College Department of Economics.
    8. Sandomirskiy, Fedor & Ushchev, Philip, 2024. "The geometry of consumer preference aggregation," CEPR Discussion Papers 19100, C.E.P.R. Discussion Papers.
    9. Miralles, Antonio & Pycia, Marek, 2021. "Foundations of pseudomarkets: Walrasian equilibria for discrete resources," Journal of Economic Theory, Elsevier, vol. 196(C).
    10. Sandomirskiy, Fedor & Ushchev, Philip, 2024. "The geometry of consumer preference aggregation," CEPR Discussion Papers 19100, C.E.P.R. Discussion Papers.

    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. Federico Echenique & Antonio Miralles & Jun Zhang, 2018. "Fairness and Efficiency for Probabilistic Allocations with Endowments," Working Papers 1055, Barcelona School of Economics.
    2. 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.
    3. Scott Duke Kominers & Alexander Teytelboym & Vincent P Crawford, 2017. "An invitation to market design," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 33(4), pages 541-571.
    4. Aygün, Orhan & Turhan, Bertan, 2021. "How to De-reserve Reserves," ISU General Staff Papers 202103100800001123, Iowa State University, Department of Economics.
    5. Miralles, Antonio & Pycia, Marek, 2021. "Foundations of pseudomarkets: Walrasian equilibria for discrete resources," Journal of Economic Theory, Elsevier, vol. 196(C).
    6. Hafalir, Isa E. & Kojima, Fuhito & Yenmez, M. Bumin, 2022. "Interdistrict school choice: A theory of student assignment," Journal of Economic Theory, Elsevier, vol. 201(C).
    7. Aygün, Orhan & Turhan, Bertan, 2021. "How to De-reserve Reserves," ISU General Staff Papers 202104130700001123, Iowa State University, Department of Economics.
    8. Echenique, Federico & Miralles, Antonio & Zhang, Jun, 2023. "Balanced equilibrium in pseudo-markets with endowments," Games and Economic Behavior, Elsevier, vol. 141(C), pages 428-443.
    9. Jingsheng Yu & Jun Zhang, 2020. "Efficient and fair trading algorithms in market design environments," Papers 2005.06878, arXiv.org, revised May 2021.
    10. Orhan Aygun & Bertan Turhan, 2020. "Designing Direct Matching Mechanism for India with Comprehensive Affirmative Action," Papers 2004.13264, arXiv.org, revised Dec 2021.
    11. Tayfun Sönmez & M. Bumin Yenmez, 2019. "Affirmative Action with Overlapping Reserves," Boston College Working Papers in Economics 990, Boston College Department of Economics, revised 15 Jan 2020.
    12. Tayfun Sönmez & M. Bumin Yenmez, 2019. "Can Economic Theory be Informative for the Judiciary? Affirmative Action in India via Vertical and Horizontal Reservations," Boston College Working Papers in Economics 1026, Boston College Department of Economics, revised 23 Jun 2021.
    13. Ehlers, Lars & Hafalir, Isa E. & Yenmez, M. Bumin & Yildirim, Muhammed A., 2014. "School choice with controlled choice constraints: Hard bounds versus soft bounds," Journal of Economic Theory, Elsevier, vol. 153(C), pages 648-683.
    14. Avataneo, Michelle & Turhan, Bertan, 2021. "Slot-specific priorities with capacity transfers," Games and Economic Behavior, Elsevier, vol. 129(C), pages 536-548.
    15. Aygün, Orhan & Turhan, Bertan, 2020. "Dynamic reserves in matching markets," Journal of Economic Theory, Elsevier, vol. 188(C).
    16. Kojima, Fuhito & Tamura, Akihisa & Yokoo, Makoto, 2018. "Designing matching mechanisms under constraints: An approach from discrete convex analysis," Journal of Economic Theory, Elsevier, vol. 176(C), pages 803-833.
    17. 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.
    18. Fragiadakis, Daniel & Troyan, Peter, 2017. "Improving matching under hard distributional constraints," Theoretical Economics, Econometric Society, vol. 12(2), May.
    19. Kamada, Yuichiro & Kojima, Fuhito, 2018. "Stability and strategy-proofness for matching with constraints: a necessary and sufficient condition," Theoretical Economics, Econometric Society, vol. 13(2), May.
    20. Tomoeda, Kentaro, 2018. "Finding a stable matching under type-specific minimum quotas," Journal of Economic Theory, Elsevier, vol. 176(C), pages 81-117.

    More about this item

    Keywords

    pricing constraints; general equilibrium; random assignments;
    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
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:bge:wpaper:1149. 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: Bruno Guallar (email available below). General contact details of provider: https://edirc.repec.org/data/bargses.html .

    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.