Competitive Equilibrium from Equal Incomes for Two-Sided Matching
YingHua He and
Jianye Yan
No 12-344, TSE Working Papers from Toulouse School of Economics (TSE)
Abstract:
Competitive Equilibrium from Equal Incomes for Two-Sided Matching Using the assignment of students to schools as our leading example, we study many-to-one two-sided matching markets without transfers. Students are endowed with cardinal preferences and schools with ordinal ones, while preferences of both sides need not be strict. Using the idea of a competitive equilibrium from equal incomes (CEEI, Hylland and Zeckhauser (1979)), we propose a new mechanism, the Generalized CEEI, in which students face different prices depending on how schools rank them. It always produces fair (justified-envy-free) and ex ante e¢ cient random assignments and stable deterministic assignments if both students and schools are truth-telling. We show that each student's incentive to misreport vanishes when the market becomes large, given all others are truthful. The mechanism is particularly relevant to school choice as schools' priority orderings over students are usually known and can be considered as their ordinal preferences. More importantly, in settings like school choice where agents have similar ordinal preferences, the mechanismis explicit use of cardinal preferences may significantly improve eficiency. We also discuss its application in school choice with group-specific quotas and in one-sided matching.
Date: 2012-10
New Economics Papers: this item is included in nep-gth and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)
Downloads: (external link)
http://www.tse-fr.eu/sites/default/files/medias/doc/wp/etrie/wp_tse_344.pdf Full text (application/pdf)
Related works:
Working Paper: Competitive Equilibrium from Equal Incomes for Two-Sided Matching (2015) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:26415
Access Statistics for this paper
More papers in TSE Working Papers from Toulouse School of Economics (TSE) Contact information at EDIRC.
Bibliographic data for series maintained by (com@tse-fr.eu).