Tiered Housing Allocation: An Experimental Analysis

38 Pages Posted: 21 Feb 2011

See all articles by Juan D. Carrillo

Juan D. Carrillo

University of Southern California - Department of Economics; Centre for Economic Policy Research (CEPR)

Saurabh Singhal

United Nations - World Institute for Development Economics Research (UNU/WIDER)

Date Written: February 2011

Abstract

We study in the laboratory, a variant of the house allocation with existing tenants problem where agents are partitioned into tiers with different privileges. Members of higher tiers receive their allocation before those in lower tiers and can also take the endowment of a member of a lower tier if they wish to. In this tiered environment, we evaluate the performance of the modified versions of three well-known mechanisms - the Top Trading Cycle (TTC), the Gale-Shapley (GS) and the Random Serial Dictatorship (RSD). For all three mechanisms, we find low rates of participation (around 40%), high rates of truth-telling conditional on participation (around 90%) and efficiency levels that are high (above 90%) but below full efficiency. Also, of the three novelties introduced in our experiment - tiered structure, multiple matches and known priority queue - only the last one has an impact on choices, with subjects being significantly more likely to participate the higher their position in the queue. Finally, the majority of subjects who do not play according to the theory still follow discernible patterns of participation and preference revelation.

Keywords: house allocation, laboratory experiment, matching

JEL Classification: C78, D61, D78

Suggested Citation

Carrillo, Juan D. and Singhal, Saurabh, Tiered Housing Allocation: An Experimental Analysis (February 2011). CEPR Discussion Paper No. DP8255, Available at SSRN: https://ssrn.com/abstract=1763663

Juan D. Carrillo (Contact Author)

University of Southern California - Department of Economics ( email )

3022 S. Vermont Ave.
Los Angeles, CA 90089
United States
213-740-3526 (Phone)
213-740-8543 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Saurabh Singhal

United Nations - World Institute for Development Economics Research (UNU/WIDER) ( email )

Katajanokanlaituri 6B
Helsinki, FIN-00160
Finland

HOME PAGE: http://www.wider.unu.edu/aboutus/people/resident-researchers/en_GB/Saurabh-Singhal/

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