Pareto-Optimal Matching Allocation Mechanisms for Boundedly Rational Agents

Bade, Sophie

doi:10.1007/s00355-016-0974-z

Item

ITEM ACTIONSEXPORT

Add to Basket

Local TagsRelease HistoryDetailsSummary

Released

Journal Article

Pareto-Optimal Matching Allocation Mechanisms for Boundedly Rational Agents

MPS-Authors

/persons/resource/persons183080

Bade, Sophie
Max Planck Institute for Research on Collective Goods, Max Planck Society;

External Resource

https://www.scopus.com/record/display.uri?eid=2-s2.0-84976498828&origin=SingleRecordEmailAlert&txGid=0
(Any fulltext)

Fulltext (restricted access)

There are currently no full texts shared for your IP range.

Fulltext (public)

There are no public fulltexts stored in PuRe

Supplementary Material (public)

There is no public supplementary material available

Citation

Bade, S. (2016). Pareto-Optimal Matching Allocation Mechanisms for Boundedly Rational Agents. Social Choice and Welfare, 47(3), 501-510. doi:10.1007/s00355-016-0974-z.

Cite as: https://hdl.handle.net/11858/00-001M-0000-002B-1186-A

Abstract

Is the Pareto optimality of matching mechanisms robust to the introduction of boundedly rational behavior? To address this question I define a restrictive and a permissive notion of Pareto optimality and consider the large set of hierarchical exchange mechanisms which contains serial dictatorship as well as Gale’s top trading cycles. Fix a housing problem with boundedly rational agents and a hierarchical exchange mechanism. Consider the set of matchings that arise with all possible assignments of agents to initial endowments in the given mechanism. I show that this set is nested between the sets of Pareto optima according to the restrictive and the permissive notion. These containment relations are generally strict, even when deviations from rationality are minimal. In a similar vein, minimal deviations from rationality suffice for the set of outcomes of Gale’s top trading cycles with all possible initial endowments to differ from the set of outcomes of serial dictatorship with all possible orders of agents as dictators. © 2016 The Author(s)