Allocation Mechanisms Without Reduction

22 Pages Posted: 17 Feb 2021

See all articles by David Dillenberger

David Dillenberger

University of Pennsylvania - Department of Economics

Uzi Segal

Boston College - Department of Economics

Date Written: February 12, 2021

Abstract

We study a simple variant of the house allocation problem (one-sided matching). We demonstrate that agents with recursive preferences may systematically prefer one allocation mechanism to the other, even among mechanisms that are considered to be the same in standard models, in the sense that they induce the same probability distribution over successful matchings. Using this, we propose a new Priority Groups mechanism and provide conditions under which it is preferred to two popular mechanisms, Random Top Cycle and Random Serial Dictatorship.

Keywords: House allocation problem, Non-expected utility, Random Top Cycle, Random Serial Dictatorship, Reduction of compound lotteries

JEL Classification: C78, D81

Suggested Citation

Dillenberger, David and Segal, Uzi, Allocation Mechanisms Without Reduction (February 12, 2021). PIER Working Paper No. 21-006, Available at SSRN: https://ssrn.com/abstract=3786809 or http://dx.doi.org/10.2139/ssrn.3786809

David Dillenberger (Contact Author)

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States
215-898-1503 (Phone)

Uzi Segal

Boston College - Department of Economics ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

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