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Fair solutions to the random assignment problem

Christian Basteck ()

Journal of Mathematical Economics, 2018, vol. 79, issue C, 163-172

Abstract: We study the problem of assigning indivisible goods to individuals where each is to receive one good. To guarantee fairness in the absence of monetary compensation, we consider random assignments that individuals evaluate according to first order stochastic dominance (sd). In particular, we find that solutions which guarantee sd-no-envy (e.g. the Probabilistic Serial) are incompatible even with the weak sd-core from equal division. Solutions on the other hand that produce assignments in the strong sd-core from equal division (e.g. Hylland and Zeckhauser’s Walrasian Equilibria from Equal Incomes) are incompatible with the strong sd-equal-division-lower-bound. As an alternative, we present a solution, based on Walrasian equilibria, that is sd-efficient, in the weak sd-core from equal division, and satisfies the strong sd-equal-division-lower-bound.

Keywords: Probabilistic serial; Walrasian equilibrium; Sd-efficiency; Sd-envy-freeness; Sd-core from equal division; Sd-equal-division-lower-bound (search for similar items in EconPapers)
Date: 2018
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Working Paper: Fair solutions to the random assignment problem (2016) Downloads
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