Quota Mechanisms: Finite-Sample Optimality and Robustness

Ian Ball and Deniz Kattwinkel

Papers from arXiv.org

Abstract: A quota mechanism links together multiple decisions by imposing a quota across decisions. We analyze the performance of quota mechanisms when the number of linked decisions is finite and the designer has imperfect knowledge of the type distribution; previously, only asymptotic results were known. Using a new optimal transport approach, we derive an ex-post decision error guarantee for quota mechanisms. This guarantee cannot be improved by any mechanisms without transfers. We quantify the sensitivity of quota mechanisms to errors in the designer's estimate of the type distribution. Finally, we show that quotas are robust to agents' beliefs about each other.

Date: 2023-09, Revised 2024-10
New Economics Papers: this item is included in nep-ger and nep-mic
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