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Welfare theorems for random assignments with priorities

Schlegel, J. C. ORCID: 0000-0002-8385-8349 & Mamageishvili, A. (2020). Welfare theorems for random assignments with priorities. Games and Economic Behavior, 124, pp. 62-81. doi: 10.1016/j.geb.2020.08.009


We introduce new notions of priority-constrained efficiency and provide priority-constrained versions of the ordinal efficiency welfare theorem for school choice lotteries. Moreover, we show that a priority-constrained version of a cardinal second welfare theorem fails to hold, but can be restored for a relaxed notion of equilibrium with priority-specific prices.

Publication Type: Article
Additional Information: © 2020. This manuscript version is made available under the CC-BY-NC-ND 4.0 license
Publisher Keywords: Matching, Random assignments, Priority-based allocation, Constrained efficiency, Pseudo-Market
Subjects: H Social Sciences > HB Economic Theory
L Education > LB Theory and practice of education
Departments: School of Policy & Global Affairs > Economics
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