The Multi-Unit Assignment Problem: Theory and Evidence from Course Allocation at Harvard

60 Pages Posted: 20 Jan 2010

See all articles by Eric B. Budish

Eric B. Budish

University of Chicago - Booth School of Business

Estelle Cantillon

Free University of Brussels (VUB/ULB) - ECARES; Centre for Economic Policy Research (CEPR)

Date Written: January 2010

Abstract

This paper uses data consisting of students' strategically reported preferences and their underlying true preferences to study the course allocation mechanism used at Harvard Business School. We show that the mechanism is manipulable in theory, manipulated in practice, and that these manipulations cause meaningful welfare losses. However, we also find that ex-ante welfare is higher than under the strategyproof and ex-post efficient alternative, the Random Serial Dictatorship. We trace the poor ex-ante performance of RSD to a phenomenon specific to multi-unit assignment, "callousness". We draw lessons for the design of multi-unit assignment mechanisms and for market design more broadly.

Keywords: course allocation, dictatorship, ex-ante efficiency, ex-post efficiency, field data, market design, multi-unit assignment, random serial dictatorship, strategic behaviour, strategyproofness

JEL Classification: C78, C93, D02

Suggested Citation

Budish, Eric B. and Cantillon, Estelle, The Multi-Unit Assignment Problem: Theory and Evidence from Course Allocation at Harvard (January 2010). CEPR Discussion Paper No. DP7641, Available at SSRN: https://ssrn.com/abstract=1539313

Eric B. Budish (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-8453 (Phone)

Estelle Cantillon

Free University of Brussels (VUB/ULB) - ECARES ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
B-1050 Brussels
Belgium
+32 2 650 3840 (Phone)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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