Efficient Market Design with Distributional Objectives
Theoretical Economics
2023-03-13 v2
Abstract
Given an initial matching and a policy objective on the distribution of agent types to institutions, we study the existence of a mechanism that weakly improves the distributional objective and satisfies constrained efficiency, individual rationality, and strategy-proofness. We show that such a mechanism need not exist in general. We introduce a new notion of discrete concavity, which we call pseudo M-concavity, and construct a mechanism with the desirable properties when the distributional objective satisfies this notion. We provide several practically relevant distributional objectives that are pseudo M-concave.
Keywords
Cite
@article{arxiv.2301.00232,
title = {Efficient Market Design with Distributional Objectives},
author = {Isa E. Hafalir and Fuhito Kojima and M. Bumin Yenmez},
journal= {arXiv preprint arXiv:2301.00232},
year = {2023}
}