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Constrained Pseudo-market Equilibrium

Echenique, Federico and Miralles, Antonio and Zhang, Jun (2019) Constrained Pseudo-market Equilibrium. . (Unpublished) https://resolver.caltech.edu/CaltechAUTHORS:20210304-093802203

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Abstract

We propose a pseudo-market solution to resource allocation problems subject to constraints. Our treatment of constraints is general: including bihierarchical constraints due to considerations of diversity in school choice, or scheduling in course allocation; and other forms of constraints needed to model, for example, the market for roommates, and combinatorial assignment problems. Constraints give rise to pecuniary externalities, which are internalized via prices. Agents pay to the extent that their purchases affect the value of relevant constraints at equilibrium prices. The result is a constrained efficient market equilibrium outcome. The outcome is fair whenever the constraints do not single out individual agents. Our result can be extended to economies with endowments, and address participation constraints.


Item Type:Report or Paper (Discussion Paper)
Related URLs:
URLURL TypeDescription
http://arxiv.org/abs/1909.05986arXivDiscussion Paper
ORCID:
AuthorORCID
Echenique, Federico0000-0002-1567-6770
Miralles, Antonio0000-0001-8146-2140
Zhang, Jun0000-0003-4154-3741
Additional Information:We thank Eric Budish, Fuhito Kojima, Andy McLennan, Herv´e Moulin, and Tayfun Sönmez for comments. Echenique thanks the National Science Foundation for its support through the grants SES-1558757 and CNS-1518941, and the Simons Institute at UC Berkeley for its hospitality while part of the paper was written. Miralles acknowledges financial support from the Spanish Ministry of Economy and Competitiveness, through the Severo Ochoa Programme for Centers of Excellence in R&D (SEV-2015-0563). Zhang acknowledges financial support from National Natural Science Foundation of China (Grant No. 71903093).
Funders:
Funding AgencyGrant Number
NSFSES-1558757
NSFCNS-1518941
Ministerio de Economía, Industria y Competitividad (MINECO)UNSPECIFIED
Severo OchoaSEV-2015-0563
National Natural Science Foundation of China71903093
Record Number:CaltechAUTHORS:20210304-093802203
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20210304-093802203
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:108307
Collection:CaltechAUTHORS
Deposited By: Tony Diaz
Deposited On:04 Mar 2021 21:36
Last Modified:04 Mar 2021 21:36

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