Le, Phuong (2013): Competitive Equilibrium in the Random Assignment Problem.
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Abstract
This paper studies the problem of random assignment with fractional endowments. In the random assignment problem, a number of objects has to be assigned to a number of agents. Though the objects are indivisible, an assignment can be probabilistic: it can give an agent some probability of getting an object. Fractional endowments complicate the matter because the assignment has to make an agent weakly better off than his endowment. I first formulate an exchange economy that resembles the random assignment problem and prove the existence of competitive equilibrium in this economy. I then propose a pseudo-market mechanism for the random assignment problem that is based on the competitive equilibrium. This mechanism is individually rational, Pareto Optimal and justified envy-free but not incentive compatible.
Item Type: | MPRA Paper |
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Original Title: | Competitive Equilibrium in the Random Assignment Problem |
Language: | English |
Keywords: | Random Assignment, Competitive Equilibrium, Mechanism Design |
Subjects: | D - Microeconomics > D4 - Market Structure, Pricing, and Design > D47 - Market Design D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D50 - General |
Item ID: | 66290 |
Depositing User: | Phuong Le |
Date Deposited: | 28 Aug 2015 05:13 |
Last Modified: | 30 Sep 2019 23:11 |
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URI: | https://mpra.ub.uni-muenchen.de/id/eprint/66290 |
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