Strategy-proofness and essentially single-valued cores revisited

We consider general allocation problems with indivisibilities where agents' preferences possibly exhibit externalities. In such contexts many different core notions were proposed. One is the gamma-core whereby blocking is only allowed via allocations where the non-blocking agents receive their endowment. We show that if there exists an allocation rule satisfying ‘individual rationality’, ‘efficiency’, and ‘strategy-proofness’, then for any problem for which the gamma-core is non-empty, the allocation rule must choose a gamma-core allocation and all agents are indifferent between all allocations in the gamma-core. We apply our result to housing markets, coalition formation and networks

Age-Based Preferences in Paired Kidney Exchange

We consider a model of Paired Kidney Exchange (PKE) with feasibility constraints on the number of patient-donor pairs involved in exchanges. Patients' preferences are restricted so that patients prefer kidneys from compatible younger donors to kidneys from older donors. In this framework, patients with compatible donors may enroll on PKE programs to receive an organ with higher expected graft survival than that of their intended donor. PKE rules that satisfy individual rationality, eciency, and strategy-proofness necessarily select pairwise exchanges. Such rules maximize the number of transplantations among pairs with the youngest donors, and sequentially among pairs with donors of dierent age group

Incentives and Implementation in Allocation Problems with Externalities

We study the implementation of social choice rules in environments with externalities. We prove the impossibility of implementing efficient and α-individually rational rules in dominant strategies. We prove that the α-core is implementable in Nash equilibrium under mild restrictions and discuss the maximality and the minimality of our results. We extend our analysis to weakly efficient rules

Researching with Whom? Stability and Manipulation

This paper explores the existence of stable research teams, when each agent's preferences depend on the set of researchers collaborating with her. We introduce a property over researchers' preferences, called tops responsiveness guaranteeing the existence of stable research teams configurations. We also provide a stable mechanism, induced by the so-called tops covering algorithm, which is strategy-proof when researchers preferences satisfy tops responsiveness. Furthermore, we also find out that, in this framework the tops covering mechanism is the unique strategy-proof mechanism that always selects stable allocations.Coalition Formation, Research Teams Configurations, Stability, Strategy-Proofness.

College admissions as a market design problem

Opiskelijavalintojen suunnittelu on herättänyt Suomessa paljon keskustelua, kun viimeaikaiset poliittiset päätökset ovat muuttaneet valintajärjestelmää keskitetympään suuntaan. Jotkut antaisivat korkeakoulujen itse päättää opiskelijavalinnoistaan, kun taas toiset uskovat keskitetyn ja ylioppilastutkinnon arvosanoja hyödyntävän valintajärjestelmän olevan entistä, hajautettua järjestelmää kustannustehokkaampi. Tarkastellen sekä keskitettyjen että hajautettujen pariutumismarkkinoiden teoriaa että myös kouluvalintoja ja pääsykokeita koskevaa empiiristä kirjallisuutta, tämä tutkielma pyrkii kuvaamaan niitä lukuisia tekijöitä, joita politiikantekijän täytyy huomioida opiskelijavalintoja kehittäessä. Todellisten mekanismien suunnitteluun hyvin soveltuvana kaksisuuntaisten pariutumismarkkinoiden kirjallisuuteen perehdytään syvällisesti. Niin sanottu student-proposing deferred acceptance –algoritmi osoittautuu parhaaksi valinnaksi, jos politiikantekijä kokee erityisen tärkeäksi, että mekanismi kannustaa hakijoita totuudenpuhumiseen, ja toisaalta valintakriteerinä käytettävää pisteytystä noudatetaan. Näin ainakin, jos korkeakoulujen ei uskota manipuloivan mekanismia. Käytännön mekanismit kuitenkin usein jättävät hakijoille joitain kannustimia raportoida todellisista eroavia preferensseja, hakijat saattavat raportoida epätosia preferensseja itselleen epäedullisesti, ja student-proposing deferred acceptance –algoritmissakin kaikkien mahdollisten hakukohteiden asettaminen preferenssijärjestykseen on vain heikosti dominanttia. Siksi ilmoitettuja preferenssejä ei tulisi ajatella suoraksi todistusaineistoksi hakijoiden preferensseistä. Korkeakouluille yhteiset pääsykokeet ylioppilastutkinnon muodossa voivat olla hajautettua järjestelmää kustannustehokkaampia, kun korkeakoulujen ei tarvitse kuluttaa resursseja erillisten pääsykokeiden järjestämiseen. Opiskelijoilla on kuitenkin sitten korkeammat kannustimet menestyä ylioppilaskokeissa, ja on jo näyttöä siitä, että ylioppilastutkinnon arvosanoja pyritään korottamaan entistä enemmän. Kokonaisvaikutus kustannuksiin jää siis epävarmaksi empiiriseksi kysymykseksi. Valmennuskurssien tärkeys vähentynee, mikä säästää yhteiskunnan resursseja ja lisää sosioekonomista tasa-arvoa. Toisaalta aikaisemmin elämässä tehtyjen valintojen merkitys korostuu, mikä saattaa heikentää sosioekonomista tasa-arvoa. Ylioppilastutkinnon tärkeyden korostuminen parantaa kannustimia ahkeraan opiskeluun jo lukio-opintojen aikana, minkä politiikantekijä voi nähdä hyödylliseksi. Vaikka yhteisiin pääsykokeisiin perustuva valintajärjestelmä parantaa huomattavasti opiskelijan mahdollisuuksia tulla valituksi toissijaiseen hakukohteeseen tultuaan hylätyksi ensisijaisesta hakukohteesta, jää empiiriseksi kysymykseksi, kuinka paljolti tämä vähentää uudelleenhakemista kilpailtuihin opiskelupaikkoihin. Tiettyihin korkeakouluihin kohdistuva ylikysyntä on suora seuraus hakijoiden preferensseistä, eikä ratkaistavissa millään mekanismilla, mikä antaa korkean arvon hakijoiden preferenssien tyydyttämiselle.The design of college admissions has been a heatedly discussed topic in Finland, as recent government initiatives have led to a more centralized system. Some argue for letting colleges decide on their admissions procedures, while others believe that a centralized matchmaking procedure with priorities determined by the matriculation examination would be more cost-effective. This thesis aims to characterize various factors that the policy maker must take into account when designing a college admissions procedure, in light of existing theoretical research on both centralized and decentralized matching markets and empirical studies on social determinants of college choice and the capacity of entrance examinations to elicit information on student ability and motivation. The two-sided matching literature is discussed extensively because of its usefulness for designing centralized clearinghouses for matching markets. The student-proposing deferred acceptance algorithm emerges as the best choice for a policy maker who regards strategy-proofness and respecting of priorities as especially important, at least if manipulation by colleges is implausible. However, strategy-proofness is fragile in practical applications, applicants may try to manipulate also strategy-proof mechanisms and reporting the whole preference relation is still only weakly dominant. Consequently, satisfaction of reported preferences should not be taken as evidence of welfare properties of a matching without qualifications. The use of a common entrance examination may be more cost effective than a system based on college-specific entrance examinations, as colleges do not then need to spend resources on organizing the examinations. However, students have then stronger incentives to perform in the common entrance examination, and there is already evidence that more students retake the matriculation examination in Finland. The overall effect on the costs of organizing entrance examinations is an uncertain empirical matter. The importance of preparation courses is likely to decrease, which saves resources and contributes to socioeconomic equity. On the other hand, making students choose on their study paths earlier in life may erode socioeconomic equity. A larger role for the matriculation examination provides stronger incentives for showing effort in high school, which the policy maker may see as beneficial. While a system with a common entrance examination makes it possible for a student to get admitted to a second preference when she is rejected by her first preference, it remains an empirical question to what extent this reduces the propensity to apply again to competitive colleges. The excess demand for certain colleges is a result of student preferences and is not solvable by any mechanism that gives a strong priority to satisfying student preferences

Expected utility without full transitivity

We generalize the classical expected-utility criterion by weakening transitivity to Suzumura consistency. In the absence of full transitivity, reflexivity and completeness no longer follow as a consequence of the system of axioms employed and a richer class of rankings of probability distributions results. This class is characterized by means of standard expected-utility axioms in addition to Suzumura consistency. An important feature of some members of our new class is that they allow us to soften the negative impact of wellknown paradoxes without abandoning the expected-utility framework altogether

A Complexity Approach for Core-Selecting Exchange under Conditionally Lexicographic Preferences

International audienceCore-selection is a crucial property of rules in the literature of resource allocation. It is also desirable, from the perspective of mechanism design, to address the incentive of agents to cheat by misreporting their preferences. This paper investigates the exchange problem where (i) each agent is initially endowed with (possibly multiple) indivisible goods, (ii) agents' preferences are assumed to be conditionally lexicographic, and (iii) side payments are prohibited. We propose an exchange rule called augmented top-trading-cycles (ATTC), based on the original TTC procedure. We first show that ATTC is core-selecting and runs in polynomial time with respect to the number of goods. We then show that finding a beneficial misreport under ATTC is NP-hard. We finally clarify relationship of misreporting with splitting and hiding, two different types of manipulations, under ATTC

The hotelling model with multiple demands

The purpose of this chapter is to provide an elementary introduction to the non-renewable resource model with multiple demand curves. The theoretical literature following Hotelling (1931) assumed that all energy needs are satisfied by one type of resource (e.g. ‘oil’), extractible at different per-unit costs. This formulation implicitly assumes that all users are the same distance from each resource pool, that all users are subject to the same regulations, and that motorist users can switch as easily from liquid fossil fuels to coal as electric utilities can. These assumptions imply, as Herfindahl (1967) showed, that in competitive equilibrium all users will exhaust a lower cost resource completely before beginning to extract a higher cost resource: simultaneous extraction of different grades of oil or of oil and coal should never occur. In trying to apply the single-demand curve model during the last twenty years, several teams of authors have independently found a need to generalize it to account for users differing in their (1) location, (2) regulatory environment, or (3) resource needs. Each research team found that Herfindahl's strong, unrealistic conclusion disappears in the generalized model; in its place, a weaker Herfindahl result emerges. Since each research team focussed on a different application, however, it has not always been clear that everyone has been describing the same generalized model. Our goal is to integrate the findings of these teams and to exposit the generalized model in a form which is easily accessible