Who Cares More? Allocation with Diverse Preference Intensities

Pietro Ortoleva, Evgenii Safonov () and Leeat Yariv
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Pietro Ortoleva: Princeton University
Leeat Yariv: Princeton University

Working Papers from Princeton University. Economics Department.

Abstract: Goods and services—public housing, medical appointments, schools—are often allocated to individuals who rank them similarly but differ in their preference intensities. We characterize optimal allocation rules when individual preferences are known and when they are not. Several insights emerge. First-best allocations may involve assigning some agents "lotteries" between high- and low-ranked goods. When preference intensities are private information, second-best allocations always involve such lotteries and, crucially, may coincide with first-best allocations. Furthermore, second-best allocations may entail disposal of services. We discuss a market-based alternative and show how it differs.

Keywords: : Market Design; Mechanism Design; Allocation Problems (search for similar items in EconPapers)
JEL-codes: C78 D02 D47 (search for similar items in EconPapers)
Date: 2021-08
New Economics Papers: this item is included in nep-des and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://pietroortoleva.com/papers/WhoCaresMore.pdf

Related works:
Working Paper: Who Cares More? Allocation with Diverse Preference Intensities (2021)
Working Paper: Who Cares More? Allocation with Diverse Preference Intensities (2021)
Working Paper: Who Cares More? Allocation with Diverse Preference Intensities (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:pri:econom:2021-10

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