Dynamic Allocation without Money

Yingni Guo and Johannes Hörner
Additional contact information
Yingni Guo: Northwestern University [Evanston]
Johannes Hörner: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CNRS - Centre National de la Recherche Scientifique

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Abstract: We analyze the optimal design of dynamic mechanisms in the absence of transfers. The agent's value evolves according to a two-state Markov chain. The designer uses future allocation decisions to elicit private information. We solve for the optimal allocation mechanism. Unlike with transfers, efficiency decreases over time. In the long run, polarization occurs. A simple implementation is provided. The agent is endowed with a "quantified entitlement," corresponding to the number of units he is entitled to claim in a row.

Keywords: Mechanism design; Principal-agent; Quota mechanism; Token budget (search for similar items in EconPapers)
Date: 2021-04-01
New Economics Papers: this item is included in nep-des
Note: View the original document on HAL open archive server: https://hal.science/hal-03187506v1
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Citations: View citations in EconPapers (1)

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