Author
Ekici, Özgün, Kesten, O.
Publication Date
2016-08
Publication Place
-
Springer Science+Business Media
Subject
Random assignment, Probabilistic serial, Equilibrium, Nash Equilibrium, Ordinal Nash Equilibrium, Strong ordinal Nash Equilibrium, Ordinal efficiency, Envy-freeness
Type
Periodical
Language
English
Digital
Yes
Manuscript
No
Library
Özyeğin University
Library Asset ID
1432-1270
Record ID
54fd5bc6-c77c-4d4b-b271-4a05b9a5f8ad
Library Location
Economics
Date
2016-08
Notes
Due to copyright restrictions, the access to the full text of this article is only available via subscription.
Sample Text
The prominent mechanism of the recent literature in the assignment problem is the probabilistic serial (PS). Under PS, the truthful (preference) proÖle always constitutes an ordinal Nash Equilibrium, inducing a random assignment that satisÖes the appealing ordinal e¢ ciency and envy-freeness properties. We show that both properties may fail to be satisÖed by a random assignment induced in an ordinal Nash Equilibrium where one or more agents are non-truthful. Worse still, the truthful proÖle may not constitute a Nash Equilibrium, and every non-truthful proÖle that constitutes a Nash Equilibrium may lead to a random assignment which is not ordinally e¢ cient, not even weakly envy-free, and which admits an ex-post ine¢ cient decomposition. A strong ordinal Nash Equilibrium may not exist, but when it exists, any proÖle that constitutes a strong ordinal Nash Equilibrium induces the random assignment induced under the truthful proÖle. The results of our equilibrium analysis of PS call for caution when implementing it in small assignment problems.
DOI
10.1007/s00182-015-0475-9
