Serial dictatorship mechanisms with reservation prices

Bettina Klaus () and Alexandru Nichifor ()
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Alexandru Nichifor: University of Melbourne

Economic Theory, 2020, vol. 70, issue 3, No 3, 665-684

Abstract: Abstract We propose a new set of mechanisms, which we call serial dictatorship mechanisms with individual reservation prices for the allocation of homogeneous indivisible objects, e.g., specialist clinic appointments. We show that a mechanism $$\varphi $$ φ satisfies minimal tradability, individual rationality, strategy-proofness, consistency, independence of unallocated objects, and non-wasteful tie-breaking if and only if there exists a reservation price vector r and a priority ordering $$\succ $$ ≻ such that $$\varphi $$ φ is a serial dictatorship mechanism with reservation prices based on r and $$\succ $$ ≻ . We obtain a second characterization by replacing individual rationality with non-imposition. In both our characterizations r, $$\succ $$ ≻ , and $$\varphi $$ φ are all found simultaneously and endogenously from the properties. Finally, we illustrate how our model, mechanism, and results capture the normative requirements governing the functioning of some real-life markets and the mechanisms that these markets use.

Keywords: Serial dictatorship; Individual reservation prices; Priority ordering; Axiomatic characterization; Strategy-proofness; Consistency (search for similar items in EconPapers)
JEL-codes: C78 D47 D71 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Serial Dictatorship Mechanisms with Reservation Prices (2019)
Working Paper: Serial Dictatorship Mechanisms with Reservation Prices (2017)
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DOI: 10.1007/s00199-019-01223-6

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