Allocation with Correlated Information: Too Good to be True

Kattwinkel, Deniz

doi:10.1145/3391403.3399536

Cited by 6 publications

(3 citation statements)

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“…30 Allocation mechanisms without money or verification are the focus of Börgers and Postl (2009); Goldlücke and Tröger (2018); and Ortoleva et al (2021) under independence and Kattwinkel (2020) under correlation.…”

Section: Literaturementioning

confidence: 99%

Costless Information and Costly Verification: A Case for Transparency

Kattwinkel

Knoepfle

2023

Journal of Political Economy

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A principal has to take a binary decision. She relies on information privately held by an agent who prefers the same action regardless of his type. The principal cannot incentivize with transfers but can learn the agent's type at a cost. Additionally, the principal privately observes a signal correlated with the agent's type. Transparent mechanisms are optimal: The principal's payoff is the same as if her signal was public. A simple cutoff form is optimal: Favorable signals ensure the agent's preferred action. Signals below this cutoff lead to the non-preferred action unless the agent appeals. An appeal always triggers type verification.

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Section: Literaturementioning

confidence: 99%

Costless Information and Costly Verification: A Case for Transparency

Kattwinkel

Knoepfle

2023

Journal of Political Economy

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“…More recently, this literature has expanded to consider settings without transfers. In most of these papers, the focus has been on showing how exogenous signals help the principal even when the agents have type‐independent preferences (see Kattwinkel (2020), Silva (2019a, 2021), Siegel and Strulovici (2021)). Closest to our paper is Silva (2019b), who considers a setting with multiple agents similar to ours but without a resource constraint (instead, agents' types are correlated) 6…”

Section: Related Literaturementioning

confidence: 99%

Optimal assignment mechanisms with imperfect verification

Pereyra

Silva

2023

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Objects of different quality are to be allocated to agents. Agents can receive at most one object, and there are not enough high‐quality objects for every agent. The value to the social planner from allocating objects to any given agent depends on that agent's private information. The social planner is unable to use transfers to give incentives for agents to convey their private information. Instead, she is able to imperfectly verify their reports through signals that are positively affiliated with each agent's type. We characterize mechanisms that maximize the social planner's expected payoff. In the optimal mechanism, each agent chooses one of various tracks, which are characterized by two thresholds. If the agent's signal exceeds the upper threshold of the chosen track, the agent receives a high‐quality object, if it is between the two thresholds, he receives a low‐quality object, and if it is below the lower threshold, he receives no object.

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“…When a buyer and seller have correlated valuations of a good,Kattwinkel (2020) shows that the seller's optimal mechanism may involve randomization. Reminiscent of some of our results, with positive correlation, the good may not be allocated to a higher-value buyer with higher probability.3 When supply in insufficient, the analysis is broadly similar but requires consideration of multiple cases depending on the severity of the goods' scarcity.…”

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Who Cares More? Allocation with Diverse Preference Intensities

Ortoleva¹,

Safonov²,

Yariv³

2021

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Goods and services---public housing, medical appointments, schools---are often allocated to individuals who rank them similarly but differ in their preference intensities. We characterize optimal allocation rules when individual preferences are known and when they are not. Several insights emerge. First-best allocations may involve assigning some agents "lotteries" between high-and low-ranked goods. When preference intensities are private information, second-best allocations always involve such lotteries and, crucially, may coincide with first-best allocations. Furthermore, second-best allocations may entail disposal of services. We discuss a market-based alternative and show how it differs.

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Allocation with Correlated Information: Too Good to be True

Cited by 6 publications

References 0 publications

Costless Information and Costly Verification: A Case for Transparency

Costless Information and Costly Verification: A Case for Transparency

Optimal assignment mechanisms with imperfect verification

Who Cares More? Allocation with Diverse Preference Intensities

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