Fraud-proof non-market allocation mechanisms

Eduardo Perez and Vasiliki Skreta

No 18466, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study the optimal design of fraud-proof allocation mechanisms with- out transfers. An agent’s eligibility relies on a score reflecting social value, but gaming generates misallocations, mistrust, unfairness and other nega- tive externalities. We characterize optimal allocation rules that are immune to gaming under two classes of gaming technologies. We examine the im- pact of demographic changes on allocations within and across identifiable groups, while accounting for resource and quota constraints. Fraud-proof allocation rules enhance fairness and trust in allocation systems at the cost of some allocative efficiency.

JEL-codes: C82 (search for similar items in EconPapers)
Date: 2023-09
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