Efficiency, Justified Envy, and Incentives in Priority-Based Matching
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aeri.20190307.pdf
Description
Published version
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609.6 KB
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Adobe PDF
Checksum (MD5)
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Author(s)
Abdulkadiroǧlu, Atila
Che, Yeon-Koo
Pathak, Parag A
Roth, Alvin E
Tercieux, Olivier
Date Issued
2020
Journal
American Economic Review: Insights
Publisher
American Economic Association
Citation
Abdulkadiroǧlu, Atila, Che, Yeon-Koo, Pathak, Parag A, Roth, Alvin E and Tercieux, Olivier. 2020. "Efficiency, Justified Envy, and Incentives in Priority-Based Matching." American Economic Review: Insights, 2 (4).
Version
Final published version
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. (JEL C78, D61)
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1257/AERI.20190307
