Publications
Public Goods, Social Alternatives, and the Lindahl-VCG Relationship
Joint with Simon Loertscher and Claudio Mezzetti
Journal of Economic Theory, 228: 106055, September 2025
Abstract: Lindahl prices, set by a fictitious auctioneer with full knowledge of values and costs, are a generalization of Walrasian prices. By making the efficient allocation utility- and profit-maximizing for all players, they induce an efficient outcome in a decentralized way even in the presence of public goods. We study a collective choice model with quasilinear utility, which encompasses the allocation of public and private goods as special cases. We show that each agent’s most favorable Lindahl payment (the smallest Lindahl price for the efficient alternative) is equal to his VCG transfer while the firm’s VCG transfer is equal to its most favorable Lindahl payment (the largest sum of Lindahl prices for the efficient alternative). Thus, the VCG mechanism incurs a deficit if and only if the set of vectors of the agents’ Lindahl payments is multi-valued. Unlike Walrasian prices, Lindahl prices are not restricted to be anonymous or additive. This is the reason why, when considering the allocation of private goods, the agents’ smallest Walrasian payments are at least as large as their most favorable Lindahl payments, and thus their VCG transfers. It is also why Lindahl prices always exist while Walrasian prices may not.
Matching Mechanisms for Refugee Resettlement
Joint with Scott Duke Kominers and Alexander Teytelboym
American Economic Review, 113 (10): 2689-2717, October 2023
A former version circulated in 2016 under the title “Refugee Resettlement” and is available here
Presented at the 2016 NBER Market Design Working Group Meeting
Media coverage: Financial Times, Bloomberg, News Deeply
Application: Refugees.AI
Abstract: Current refugee resettlement processes account for neither the preferences of refugees nor the priorities of hosting communities. We introduce a new framework for matching with multidimensional knapsack constraints that captures the (possibly multidimensional) sizes of refugee families and the capacities of communities. We propose four refugee resettlement mechanisms and two solution concepts that can be used in refugee resettlement matching under various institutional and informational constraints. Our theoretical results and simulations using refugee resettlement data suggest that preference-based matching mechanisms can improve match efficiency, respect priorities of communities, and incentivize refugees to report where they would prefer to settle.
When Walras Meets Vickrey
Joint with Simon Loertscher and Claudio Mezzetti
Theoretical Economics, 17 (4): 1803-1845, November 2022
Abstract: We consider general asset market environments in which agents with quasilinear payoffs are endowed with objects and have demands for other agents’ objects. We show that if all agents have a maximum demand of one object and are endowed with at most one object, the VCG transfer of each agent is equal to the largest net Walrasian price of this agent. Consequently, the VCG deficit is equal to the sum of the largest net Walrasian prices over all agents. Generally, whenever Walrasian prices exist, the sum of the largest net Walrasian prices is a nonnegative lower bound for the deficit, implying that no dominant-strategy mechanism runs a budget surplus while respecting agents’ ex post individual rationality constraints.
Comparative Statics for Size-Dependent Discounts in Matching Markets
Joint with Scott Duke Kominers and Alexandru Nichifor
Journal of Mathematical Economics, 90: 127-131, October 2020
Abstract: We prove a natural comparative static for many-to-many matching markets in which agents’ choice functions exhibit size-dependent discounts: reducing the extent to which some agent discounts additional partners leads to improved outcomes for the agents on the other side of the market, and worsened outcomes for the agents on the same side of the market. Our argument draws upon recently developed methods bringing tools from choice theory into matching.
Essentially Stable Matchings
Joint with Peter Troyan and Andrew Kloosterman
Games and Economic Behavior, 120: 370-390, March 2020
Abstract: We propose a solution to the conflict between fairness and efficiency in one-sided matching markets. A matching is essentially stable if any priority-based claim initiates a chain of reassignments that results in the initial claimant losing the object. We show that an essentially stable and Pareto efficient matching always exists and that Kesten’s (2010) EADA mechanism always selects one while other common Pareto efficient mechanisms do not. Additionally, we show that there exists a student-pessimal essentially stable matching and that the Rural Hospital Theorem extends to essential stability. Finally, we analyze the incentive properties of essentially stable mechanisms.
Two-Sided Allocation Problems, Decomposability, and the Impossibility of Efficient Trade
Joint with Simon Loertscher, Leslie Marx, and Tom Wilkening
Journal of Economic Theory, 179: 416-454, January 2019
Abstract: Previous literature has shown that private information is a transaction cost that prevents efficient reallocation in two-sided setups with bilateral trade or homogeneous goods. We derive conditions under which the impossibility of efficient trade extends to rich environments in which buyers and sellers have multi-dimensional private types, accommodating many-to-many trades and heterogeneous objects. If agents can be decomposed into unit constituents, the allocation problem can be represented as an assignment game and impossibility obtains through a generalization of Shapley’s (1962) result that buyers and sellers are complements. We introduce a general family of payoff functions that ensures decomposability and thus impossibility.
Working Papers
Processing Reserves Simultaneously [10min talk] [25min talk] [60min talk]
Extended Abstract in the Proceedings of the 22nd ACM Conference on Economics and Computation (2021), pp. 345-6
Best Job Market Paper Award, European Economic Association and UniCredit Foundation (2020)
Presented at the 2020 NBER Market Design Working Group Meeting
The job market version (October 2020) is available here and the first version (August 2020) is available here
Abstract: Policymakers frequently use reserve categories to combine competing objectives in allocating a scarce resource based on priority. For example, schools may prioritize students from underprivileged backgrounds for some of their seats while allocating the rest of them based solely on academic merit. The order in which different categories are processed has been shown to have an important yet subtle impact on allocative outcomes—and it has led to unintended consequences in practice. I introduce a new, more transparent way of processing reserves, which handles all categories simultaneously. I characterize my solution, showing that it satisfies basic desiderata and is category neutral: if an agent qualifies for n categories, she takes 1/n units from each of them. A practical advantage of this approach is that the relative importance of categories is entirely captured by their quotas.
Stability in Matching Markets with Sizes
A former version circulated in 2017 and is available here.
Abstract: Matching markets such as day care, student exchange, refugee resettlement, and couples problems involve agents of different sizes, that is agents who require different amounts of capacity. I study a matching market between agents and objects where the size of an agent is either one or two. Contrary to canonical models, the set of stable matchings may be empty. I identify a trade-off for existence: it is always possible to either bound the instability to a certain number of units per object or to eliminate waste but the existence of a matching that does both is not guaranteed. I develop two fairness criteria that lie on either side of this trade-off: unit-stability bounds the instability and size-stability eliminates waste. I show that size-stability is more desirable than unit-stability from a welfare point of view.