Efficiency, Justified Envy, and Incentives in Priority-Based Matching

Atila Abdulkadiroğlu, Yeon-Koo Che, Parag Pathak, Alvin Roth and Olivier Tercieux ()
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Olivier Tercieux: 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 - 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

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Abstract: Top trading cycles (TTC) is Pareto efficient and strategy-proof in priority-based matching, but so are other mechanisms including serial dictatorship. We show that TTC minimizes justified envy among all Pareto efficient and strategy-proof mechanisms in one-to-one matching. In many-to-one matching, TTC admits less justified envy than serial dictatorship in an average sense. Empirical evidence from New Orleans OneApp and Boston Public Schools shows that TTC has significantly less justified envy than serial dictatorship.

Date: 2020
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Published in American Economic Review: Insights, 2020, 2 (4), pp.425-441. ⟨10.1257/aeri.20190307⟩

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Related works:
Journal Article: Efficiency, Justified Envy, and Incentives in Priority-Based Matching (2020)
Working Paper: Efficiency, Justified Envy, and Incentives in Priority-Based Matching (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:halshs-03029897

DOI: 10.1257/aeri.20190307

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