Efficient sequential assignment with incomplete information
Efficient sequential assignment with incomplete information
We study the welfare maximizing assignment of several heterogeneous, commonly ranked objects to impatient agents with privately known characteristics who arrive sequentially according to a Poisson or renewal process. There is a deadline after which no more objects can be allocated. We first show that the dynamically efficient allocation, characterized by Albright [Albright, S.C., 1974. Optimal sequential assignments with random arrival times. Manage. Sci. 21 (1), 60–67], is implementable by the dynamic version of VCG mechanism. We then obtain several properties of the welfare maximizing policy using stochastic dominance measures of increased variability and majorization arguments. We also propose redistribution mechanisms that 1) implement the efficient allocation, 2) satisfy individual rationality, 3) never run a budget deficit, 4) may run a budget surplus that vanishes asymptotically.
144-154
Gershkov, Alex
214a0b5e-c742-486d-b910-c8ec702c943a
Moldovanu, Benny
f84fdd42-3143-4219-be24-fb26385b106d
Gershkov, Alex
214a0b5e-c742-486d-b910-c8ec702c943a
Moldovanu, Benny
f84fdd42-3143-4219-be24-fb26385b106d
Gershkov, Alex and Moldovanu, Benny
(2009)
Efficient sequential assignment with incomplete information.
Games and Economic Behavior, 68 (1), .
(doi:10.1016/j.geb.2009.06.005).
Abstract
We study the welfare maximizing assignment of several heterogeneous, commonly ranked objects to impatient agents with privately known characteristics who arrive sequentially according to a Poisson or renewal process. There is a deadline after which no more objects can be allocated. We first show that the dynamically efficient allocation, characterized by Albright [Albright, S.C., 1974. Optimal sequential assignments with random arrival times. Manage. Sci. 21 (1), 60–67], is implementable by the dynamic version of VCG mechanism. We then obtain several properties of the welfare maximizing policy using stochastic dominance measures of increased variability and majorization arguments. We also propose redistribution mechanisms that 1) implement the efficient allocation, 2) satisfy individual rationality, 3) never run a budget deficit, 4) may run a budget surplus that vanishes asymptotically.
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e-pub ahead of print date: 21 June 2009
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Local EPrints ID: 503666
URI: http://eprints.soton.ac.uk/id/eprint/503666
ISSN: 0899-8256
PURE UUID: 92532443-3dc9-496b-87e4-d27a73c2be6d
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Date deposited: 08 Aug 2025 16:36
Last modified: 09 Aug 2025 02:19
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Author:
Alex Gershkov
Author:
Benny Moldovanu
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