Optimal object assignment mechanisms with imperfect type veri?cation

Francisco Silva and Juan Pereyra ()

No 540, Documentos de Trabajo from Instituto de Economia. Pontificia Universidad Católica de Chile.

Abstract: There are objects of di?erent quality to be assigned to agents. Agents can be assigned at most one object and there are not enough high quality objects for every agent. The social planner is unable to use transfers to give incentives for agents to convey their private information; instead, she is able to imperfectly verify their reports. We characterize a mechanism that maximizes welfare, where agents face di?erent lotteries over the various objects, depending on their report. We then apply our main result to the case of college admissions. We ?nd that optimal mechanisms are, in general, ex-post ine?cient and do strictly better than the standard mechanisms that are typically studied in the matching literature.

Date: 2020
New Economics Papers: this item is included in nep-des and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:ioe:doctra:540

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