Slot-specific Priorities with Capacity Transfers
22 Pages Posted: 27 Mar 2020 Last revised: 23 Sep 2020
Date Written: September 21, 2020
In many real-world matching applications, there are restrictions for institutions either on priorities of their slots or on the transferability of unfilled slots over others (or both). Motivated by the need in such real-life matching problems, this paper formulates a family of practical choice rules, slot-specific priorities with capacity transfers (SSPwCT). These practical rules invoke both slot-specific priorities structure and transferability of vacant slots. We show that the cumulative offer mechanism (COM) is stable, strategy-proof and respects improvements with regards to SSPwCT choice rules. Transferring the capacity of one more unfilled slot, while all else is constant, leads to strategy-proof Pareto improvement of the COM. Following Kominer’s (2020) formulation, we also provide comparative static results for expansion of branch capacity and addition of new contracts in the SSPwCT framework. Our results have implications for resource allocation problems with diversity considerations.
Keywords: Market Design, Matching, Affirmative Action
JEL Classification: C78, D47
Suggested Citation: Suggested Citation