Welfare-maximizing assignment of agents to hierarchical positions
Isa Hafalir and
Journal of Mathematical Economics, 2015, vol. 61, issue C, 253-270
We allocate agents to three kinds of hierarchical positions: top, medium, and low. No monetary transfers are allowed. We solve for the incentive-compatible (IC) mechanisms that maximize a family of weighted social welfares that includes utilitarian and Rawlsian welfares. When the market is tough (all agents bear positive risk of obtaining a low position in any IC and feasible mechanism), then the pseudomarket mechanism with equal budgets (PM) and the Boston mechanism without priorities (BM) yield identical assignments which are always optimal. Otherwise, when the market is mild, PM and BM differ and each one implements the optimal rule under different assumptions on the curvature of virtual valuations. We also establish that both BM and PM mechanisms guarantee IC Pareto-optimal assignments for a domain of preference distributions satisfying weak assumptions.
Keywords: Mechanism design; Welfare maximization; No transfers; Assignment problems; Pseudomarket; Boston mechanism (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Working Paper: Welfare-Maximizing Assignment of Agents to Hierarchical Positions
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:61:y:2015:i:c:p:253-270
Access Statistics for this article
Journal of Mathematical Economics is currently edited by Atsushi (A.) Kajii
More articles in Journal of Mathematical Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().