Abstract
We study a large market model of dynamic matching with no monetary transfers
and a continuum of agents who have to be assigned items at each date. When the social
planner can only elicit ordinal agents’ preferences, we prove that under a mild regularity
assumption, incentive compatible and ordinally efficient allocation rules coincide with
spot mechanisms. The latter specify “virtual prices” for items at each date and, for each
agent, randomly selects a budget of virtual money at the beginning of time. When the
social planner can elicit cardinal preferences, we prove that under a similar regularity
assumption, incentive compatible and Pareto efficient mechanisms coincide with Spot
Menu of Random Budgets mechanisms. These are similar to spot mechanisms except
that, at the beginning of time, each agent chooses within a menu, a distribution over
budget of virtual money.
and a continuum of agents who have to be assigned items at each date. When the social
planner can only elicit ordinal agents’ preferences, we prove that under a mild regularity
assumption, incentive compatible and ordinally efficient allocation rules coincide with
spot mechanisms. The latter specify “virtual prices” for items at each date and, for each
agent, randomly selects a budget of virtual money at the beginning of time. When the
social planner can elicit cardinal preferences, we prove that under a similar regularity
assumption, incentive compatible and Pareto efficient mechanisms coincide with Spot
Menu of Random Budgets mechanisms. These are similar to spot mechanisms except
that, at the beginning of time, each agent chooses within a menu, a distribution over
budget of virtual money.
| Original language | English |
|---|---|
| Journal | Theoretical Economics |
| Publication status | E-pub ahead of print - 2024 |