The generalized random priority mechanism with budgets
Journal of Economic Theory, 2018, vol. 177, issue C, 708-733
This paper studies allocation problems with and without monetary transfers, such as combinatorial auctions, school choice, and course allocation. Interdependent values and multidimensional signals are allowed. Despite known negative results, a mechanism exists that is feasible, ex post individually rational, ex post incentive compatible, and asymptotically both efficient and envy-free. This mechanism is a special case of the generalized random priority mechanism (GRP), which always satisfies the first three properties. The asymptotic properties follow as a corollary of the main theorem: GRP approximates virtually any infinite-market mechanism in large finite markets.
Keywords: Ex post incentive compatibility; Random allocation; Random priority; Large market; Rational expectations equilibrium; Information aggregation (search for similar items in EconPapers)
JEL-codes: C72 D44 D47 D61 D63 D82 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:177:y:2018:i:c:p:708-733
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