Second-best mechanisms in queuing problems without transfers:The role of random priorities

Francis Bloch ()
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Francis Bloch: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, UP1 - Université Paris 1 Panthéon-Sorbonne

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Abstract: This paper characterizes the second-best mechanism chosen by a benevolent planner under incentive compatibility constraints in queuing problems without monetary transfers. In the absence of monetary compensations, separation between types can only occur if jobs are processed with a probability strictly smaller than one for some configurations of the types. This entails a large efficiency cost, and the planner optimally chooses a pooling contract when types are drawn from a continuous distribution and when binary types are sufficiently close. In the binary model, a separating contract is optimal when the difference between high and low types is large, and results in a low probability of processing jobs when both agents announce high types.

Date: 2017-11
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Published in Mathematical Social Sciences, 2017, 90, pp.73-79. ⟨10.1016/j.mathsocsci.2017.08.006⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03969737

DOI: 10.1016/j.mathsocsci.2017.08.006

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