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Optimal object assignment mechanisms with imperfect type veri?cation

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  • Francisco Silva
  • Juan Pereyra

Abstract

There are objects of di?erent quality to be assigned to agents. Agents can be assigned at most one object and there are not enough high quality objects for every agent. The social planner is unable to use transfers to give incentives for agents to convey their private information; instead, she is able to imperfectly verify their reports. We characterize a mechanism that maximizes welfare, where agents face di?erent lotteries over the various objects, depending on their report. We then apply our main result to the case of college admissions. We ?nd that optimal mechanisms are, in general, ex-post ine?cient and do strictly better than the standard mechanisms that are typically studied in the matching literature.

Suggested Citation

  • Francisco Silva & Juan Pereyra, 2020. "Optimal object assignment mechanisms with imperfect type veri?cation," Documentos de Trabajo 540, Instituto de Economia. Pontificia Universidad Católica de Chile..
    • Handle: RePEc:ioe:doctra:540
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    File URL: https://www.economia.uc.cl/docs/doctra/dt-540.pdf
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    References listed on IDEAS

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    1. 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.
    2. Francisco Silva, 2019. "If We Confess Our Sins," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(3), pages 1389-1412, August.
    3. Silva, Francisco, 2019. "Renegotiation proof mechanism design with imperfect type verification," Theoretical Economics, Econometric Society, vol. 14(3), July.
    4. 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.
    5. Tymofiy Mylovanov & Andriy Zapechelnyuk, 2017. "Optimal Allocation with Ex Post Verification and Limited Penalties," American Economic Review, American Economic Association, vol. 107(9), pages 2666-2694, September.
    6. Paul R. Milgrom, 1981. "Good News and Bad News: Representation Theorems and Applications," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 380-391, Autumn.
    7. Calsamiglia, Caterina & Güell, Maia, 2018. "Priorities in school choice: The case of the Boston mechanism in Barcelona," Journal of Public Economics, Elsevier, vol. 163(C), pages 20-36.
    8. Lien, Jaimie W. & Zheng, Jie & Zhong, Xiaohan, 2017. "Ex-ante fairness in the Boston and serial dictatorship mechanisms under pre-exam and post-exam preference submission," Games and Economic Behavior, Elsevier, vol. 101(C), pages 98-120.
    9. Balinski, Michel & Sonmez, Tayfun, 1999. "A Tale of Two Mechanisms: Student Placement," Journal of Economic Theory, Elsevier, vol. 84(1), pages 73-94, January.
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    Cited by:

    1. Bloch, Francis & Dutta, Bhaskar & Dziubiński, Marcin, 2023. "Selecting a winner with external referees," Journal of Economic Theory, Elsevier, vol. 211(C).

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