A New Ex-Ante Efficiency Criterion and Implications for the Probabilistic Serial Mechanism

34 Pages Posted: 11 May 2016 Last revised: 19 Dec 2017

See all articles by Battal Dogan

Battal Dogan

Department of Economics, University of Bristol

Serhat Dogan

Bilkent University - Department of Economics

Kemal Yildiz

Bilkent University - Department of Economics

Date Written: December 18, 2017

Abstract

We introduce and analyze an efficiency criterion for probabilistic assignment of objects, when only ordinal preference information is available. This efficiency criterion is based on the following domination relation: a probabilistic assignment dominates another assignment if it is ex-ante efficient for a strictly larger set of utility profiles consistent with the ordinal preferences. We provide a simple characterization of this domination relation. We revisit an extensively studied assignment mechanism, the Probabilistic Serial mechanism (Bogomolnaia and Moulin, 2001), which always chooses a “fair” assignment. We show that the Probabilistic Serial assignment may be dominated by another fair assignment. We provide conditions under which the serial assignment is undominated among fair assignments.

Keywords: Ex-Ante Efficiency, Probabilistic Assignment, Fairness, Probabilistic Serial Mechanism

JEL Classification: C60, C71, C78, D61

Suggested Citation

Dogan, Battal and Dogan, Serhat and Yildiz, Kemal, A New Ex-Ante Efficiency Criterion and Implications for the Probabilistic Serial Mechanism (December 18, 2017). Available at SSRN: https://ssrn.com/abstract=2777970 or http://dx.doi.org/10.2139/ssrn.2777970

Battal Dogan (Contact Author)

Department of Economics, University of Bristol ( email )

United Kingdom

Serhat Dogan

Bilkent University - Department of Economics ( email )

06533 Ankara
Turkey

Kemal Yildiz

Bilkent University - Department of Economics ( email )

Bilkent University, Dept. of Economics
BILKENT
Ankara, 06800
Turkey

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