Inefficiency of Random Serial Dictatorship under incomplete information

Ethem Akyol

Journal of Economic Theory, 2023, vol. 213, issue C

Abstract: We study the problem of allocating n objects to n agents without monetary transfers in a setting where each agent's preference over objects is private. We assume that each agent's value vector (values for n objects) is independently drawn from an exchangeable distribution and show that the celebrated Random Serial Dictatorship mechanism is welfare inferior to another allocation method, the Random Boston mechanism, when the number of agents and objects is large. Specifically, every type of every agent has a strictly higher interim expected utility under the Random Boston mechanism than under the Random Serial Dictatorship mechanism. Moreover, this strict dominance holds even at the limit.

Keywords: Allocation without transfers; Bayesian incentive compatibility; Random Serial Dictatorship; Random Boston mechanism (search for similar items in EconPapers)
JEL-codes: D47 D82 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:213:y:2023:i:c:s0022053123001370

DOI: 10.1016/j.jet.2023.105741

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