Slot-specific Priorities with Capacity Transfers

22 Pages Posted: 27 Mar 2020 Last revised: 23 Sep 2020

Date Written: September 21, 2020

Abstract

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

Avataneo, Michelle and Turhan, Bertan, Slot-specific Priorities with Capacity Transfers (September 21, 2020). Available at SSRN: https://ssrn.com/abstract=3547785 or http://dx.doi.org/10.2139/ssrn.3547785

Michelle Avataneo

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Bertan Turhan (Contact Author)

Iowa State University ( email )

260 Heady Hall
Ames, IA 50011
United States

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