I study school assignment problems, focusing on two popular mechanisms: the Boston Mechanism (BM) and Deferred Acceptance (DA). The former has been criticized regarding both efficiency and fairness, particularly its treatment of naïve (non-strategic) students. The latter has been suggested in its place, and has already replaced the former in several cities. The critique of BM and support of DA were founded on the assumption of strict priorities, i.e. schools rank every child so that there are as many priority classes as there are students. In almost all cities where these mechanisms are applied, however, the actual number of priority classes (e.g. walking-distance and sibling in school) that may be used is orders of magnitude smaller than the number of students, and tie-breaking lotteries are needed. Approximating this case by assuming only one priority class I show that BM outperforms DA according to several ex ante efficiency criteria. DA performs very poorly if all students share identical ordinal preferences over schools. Simulations show that these analytical results extend to more realistic cases. Finally, I suggest a simple modification to BM, which according to simulations protects naïve students while largely preserving its efficiency properties.

"Cardinal Bayesian allocation mechanisms without transfers" click here

UNDER EVALUATION (REVISE AND RESUBMIT) at Journal of Economic Theory. This study contributes to the solution of the optimal allocation mechanism problem with no transfers, under Bayesian incentive compatibility. Applications include collusion in several markets or auctions, task allocation in firms, and regulatory and rationing issues.

"Self-enforced collusion through comparative cheap talk in simultaneous auctions with entry" click here

FORTHCOMING at Economic Theory. I study a self-enforced collusion mechanism in simultaneous auctions based on complete comparative cheap talk and endogenous entry. This collusion scheme is difficult to generalize to an arbitrary number of bidders, since the entry-decision stage of the game is characterized by strategic substitutes. This paper analyzes more-than-two-bidder, symmetric-prior cases. Two results are proved: 1) as the number of objects grows large, a full comparative cheap talk equilibrium exists and it yields asymptotically fully efficient collusion; and 2) there is always a partial comparative cheap talk equilibrium. All these results are supported by intuitive equilibria at the entry-decision stage. Numerical examples suggest that full comparative cheap talk equilibria are not uncommon even with few objects.

"Intuitive and noncompetitive equilibria in weakly efficient auctions with entry costs" click here

PUBLISHED at Mathematical Social Sciences (no. 53 vol. 3, 448-455). I generalize the concept of intuitive equilibrium in auctions with endogenous entry: strong bidders are more prone to take part in the auction. Noncompetitive equilibria, with only one final bidder if any, may arise whenever there is a potential bidder who is "strong enough". I argue that intuitive equilibria tend to generate a more efficient allocation but a lower seller's revenue than nonintuitive ones.

"Easy collusion mechanisms in auctions with entry" click here

In simultaneous weakly efficient auctions with entry costs, self-enforced collusion arises from total (complete ranking) comparative cheap talk. Even if the seller optimally chooses reservation prices, expected revenue losses with respect to the non-collusive equilibrium are unavoidable.

Other research projects: