An algorithm for identifying agent-k-linked allocations in economies with indivisibilities

We consider envy-free (and budget-balanced) rules that are least manipulable with respect to agents counting or with respect to utility gains. Recently it has been shown that for any profile of quasi-linear preferences, the outcome of any such least manipulable envy-free rule can be obtained via agent-k-linked allocations. This note provides an algorithm for identifying agent-k-linked allocations

Transferring ownership of public housing to existing tenants: a mechanism design approach

This paper explores situations where tenants in public houses, in a specific neighborhood, are given the legislated right to buy the houses they live in or can choose to remain in their houses and pay the regulated rent. This type of legislation has been passed in many European countries in the last 30-35 years (the U.K. Housing Act 1980 is a leading example). The main objective with this type of legislation is to transfer the ownership of the houses from the public authority to the tenants. To achieve this goal, selling prices of the public houses are typically heavily subsidized. The legislating body then faces a trade-off between achieving the goals of the legislation and allocating the houses efficiently. This paper investigates this specific trade-off and identifies an allocation rule that is individually rational, equilibrium selecting, and group non-manipulable in a restricted preference domain that contains “almost all” preference profiles. In this restricted domain, the identified rule is the equilibrium selecting rule that transfers the maximum number of ownerships from the public authority to the tenants. This rule is preferred to the current U.K. system by both the existing tenants and the public authority. Finally, a dynamic process for finding the outcome of the identified rule, in a finite number of steps, is provided

Gale's fixed tax for exchanging houses

We consider the taxation of exchanges among a set of agents where each agent owns one object. Agents may have different valuations for the objects and they need to pay taxes for exchanges. Using basic properties, we show that if pairwise (or some) exchanges of objects are allowed, then all exchanges (in any possible manner) must be feasible. Furthermore, whenever any agent exchanges his object, he pays the same fixed tax (a lump sum payment which is identical for all agents) independently of which object he consumes. Gale's top trading cycles algorithm finds the final allocation using the agents' valuations adjusted with the fixed tax. Our mechanisms are in stark contrast to Clarke-Groves taxation schemes or the max-med schemes proposed by Sprumont (2013)

Pricing in Non-Convex Markets: How to Price Electricity in the Presence of Demand Response

A Walrasian competitive equilibrium defines a set of linear and anonymous prices where no coalition of market participants wants to deviate. Walrasian prices do not exist in non-convex markets in general, with electricity markets as an important real-world example. However, the availability of linear and anonymous prices is important for derivatives markets and as a signal for scarcity. Prior literature on electricity markets assumed price-inelastic demand and introduced numerous heuristics to compute linear and anonymous prices on electricity markets. At these prices market participants often make a loss. As a result, market operators provide out-of-market side-payments (so-called make-whole payments) to cover these losses. Make-whole payments dilute public price signals and are a significant concern in electricity markets. Besides, demand-side flexibility becomes increasingly important with growing levels of renewable energy sources. Demand response implies that different flexibility options come at different prices, and the proportion of price-sensitive demand that actively bids on power exchanges will further increase. We show that with price-inelastic demand there are simple pricing schemes that are individually rational (participants do not make a loss), clear the market, support an efficient solution and do not require make-whole payments. With the advent of demand-side bids, budget balanced prices (no subsidies are necessary) cannot exist anymore, and we propose a pricing rule that minimizes make-whole payments. We describe design desiderata that different pricing schemes satisfy and report results of experiments that evaluate the level of subsidies required for linear and anonymous prices on electricity spot markets with price-sensitive demand

Which Is the Fairest One of All? A Positive Analysis of Justice Theories

This paper evaluates numerous positive and normative theories of justice in positive terms, i.e., in terms of how accurately they describe the impartial fairness preferences of real people. In addition, the paper proposes and defends an integrated justice theory based on preferences over four distinct and sometimes conflicting forces. These forces frame the analysis of the individual theories and inspire four corresponding theoretical classes: equality and need, utilitarianism and welfare economics, equity and desert, and context. This synthesis enables one to treat justice rigorously and to reconcile results that often appear contradictory or at odds with alternative theories

Matching with real-life constraints

This thesis consists of four chapters. The first chapter explains the relevance of the research that has been undertaken and it contains an overview of this research for a general audience. The second chapter studies a multi-unit assignment with endogenous quotas in a dichotomous preference domain. The main conclusion I obtain is that pseudo-market mechanisms perform poorly in this type of environment. The third and fourth chapters use matching theory to understand segregation in matching environments ranging from integrating kidney exchanges platforms to the increase in interracial marriages after the popularization of online dating platforms. In both Chapters, using different formulations, I show under which conditions social integration can be obtained

Mechanisms for fair allocation problems: no-punishment payment rules in verifiable settings

Mechanism design is considered in the context of fair allocations of indivisible goods with monetary compensation, by focusing on problems where agents' declarations on allocated goods can be verified before payments are performed. A setting is considered where verification might be subject to errors, so that payments have to be awarded under the presumption of innocence, as incorrect declared values do not necessarily mean manipulation attempts by the agents. Within this setting, a mechanism is designed that is shown to be truthful, efficient, and budget-balanced. Moreover, agents' utilities are fairly determined by the Shapley value of suitable coalitional games, and enjoy highly desirable properties such as equal treatment of equals, envy-freeness, and a stronger one called individual-optimality. In particular, the latter property guarantees that, for every agent, her/his utility is the maximum possible one over any alternative optimal allocation. The computational complexity of the proposed mechanism is also studied. It turns out that it is #P-complete so that, to deal with applications with many agents involved, two polynomial-time randomized variants are also proposed: one that is still truthful and efficient, and which is approximately budget-balanced with high probability, and another one that is truthful in expectation, while still budget-balanced and efficient