Strategic Analysis of Fair Rank-Minimizing Mechanisms with Agent Refusal Option
Abstract
This study examines strategic issues in fair rank-minimizing mechanisms, which choose an assignment that minimizes the average rank of object types to which agents are assigned and satisfy a fairness property called equal treatment of equals. As one of these fair mechanisms, the uniform rank-minimizing mechanism is considered. We focus on the case where agents can refuse their assignment and obtain the outside option instead. Without the refusal option, truth-telling is not strategically dominated by any strategies if a fair rank-minimizing mechanism is used. However, if agents have the option and the uniform rank-minimizing mechanism is used, then a strategy called an outside option demotion strategy strategically dominates truth-telling. Moreover, we show that adopting this strategy may lead to inefficient assignments. To counter this, we propose a modification of the uniform rank-minimizing mechanism, though it may lead agents to strategically reduce the number of acceptable types.
- Publication:
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arXiv e-prints
- Pub Date:
- August 2024
- DOI:
- 10.48550/arXiv.2408.01673
- arXiv:
- arXiv:2408.01673
- Bibcode:
- 2024arXiv240801673O
- Keywords:
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- Economics - Theoretical Economics