Characterizations of the Probabilistic Serial Mechanism

Abstract

This paper provides two axiomatizations of the probabilistic serial mechanism. First, the mechanism is characterized by ordinal efficiency, envy-freeness, and truncation robustness. Truncation robustness restricts changes in assignments when agents truncate their preference lists. In this characterization, ordinal efficiency and envy-freeness can be replaced with weaker axioms, 2-ordinal efficiency and weak envy-freeness. Second, the mechanism is characterized by ordinal efficiency, independence of unassigned objects (IUO), and Rawlsian criterion. IUO requires assignments to be independent of whether an agent reports an object as acceptable or not, when she has no chance to obtain it even if she does so. Rawlsian criterion is a fairness condition that specifies how a mechanism should treat the worst-off agent.

Keywords: Random Assignment, Probabilistic Serial Mechanism

JEL Classification: C70, D61, D63