Lottery or waiting-line auction?

Taylor, Grant A.; Tsui, Kevin K.; Zhu, Ling

doi:10.1016/s0047-2727(01)00196-7

Cited by 40 publications

(30 citation statements)

References 15 publications

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“…Some have argued that the use of such non-price mechanisms reflects concerns for fairness (see Aubert [1959], Goodwin [1992], Hofstee [1990]). Taylor et al [2003] argue a lottery, one such non-price mechanism, is "usually employed to resolve allocation problems in order to reflect a spirit of fairness and equality, since everyone has an equal chance to win, regardless of whatever characteristics or qualities one may possess" (p. 1316). 2 While the efficiency properties of specific mechanisms within the class of non-price mechanisms may vary (see Taylor et al [2003]), in general the choice between a price and a non-price mechanism implies a tradeoff between efficiency and equity.…”

Section: Introductionmentioning

confidence: 99%

“…Taylor et al [2003] argue a lottery, one such non-price mechanism, is "usually employed to resolve allocation problems in order to reflect a spirit of fairness and equality, since everyone has an equal chance to win, regardless of whatever characteristics or qualities one may possess" (p. 1316). 2 While the efficiency properties of specific mechanisms within the class of non-price mechanisms may vary (see Taylor et al [2003]), in general the choice between a price and a non-price mechanism implies a tradeoff between efficiency and equity. Historical and continued current use of nonprice mechanisms for some publicly provided goods suggests that policy actions may be at least partially driven by some other objective.…”

Section: Introductionmentioning

confidence: 99%

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Hybrid allocation mechanisms for publicly provided goods

Evans

Vossler

Flores

2009

Journal of Public Economics

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Abstract:Motivated by efficiency and equity concerns, public resource managers have increasingly utilized hybrid allocation mechanisms that combine features of commonly used price (e.g., auction) and non-price (e.g., lottery) mechanisms. This study serves as an initial investigation of these hybrid mechanisms, exploring theoretically and experimentally how the opportunity to obtain a homogeneous good in a subsequent lottery affects Nash equilibrium bids in discriminative and uniform price auctions. The lottery imposes an opportunity cost to winning the auction, systematically reducing equilibrium auction bids. In contrast to the uniform price auction, equilibrium bids in the uniform price hybrid mechanism vary with bidder risk preferences. Experimental evidence suggests that the presence of the lottery and risk attitudes (elicited through a preceding experiment) impact auction bids in the directions predicted by theory. Finally, we find that theoretically and experimentally, the subsequent lottery does not compromise the efficiency of the auction in the hybrid mechanisms.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Hybrid allocation mechanisms for publicly provided goods

Evans

Vossler

Flores

2009

Journal of Public Economics

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“…Finally, when we move to N = 3 and M = 2, the contest is again better than a lottery, with contest surplus, 0.299, and lottery surplus, 0.273. Taylor et al (2003) and Koh et al (2006) analyze allocation through lotteries and queues, and …nd that lotteries are more e¢ cient in comparison to waiting line auctions if the time valuation are less varied and objects are scarce. This may be surprising compared to the …rst part of the proposition, however the second part shows how our paper is consistent.…”

Section: Scarcitymentioning

confidence: 99%

Optimal allocation without transfer payments

Chakravarty

Kaplan

2013

Games and Economic Behavior

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Often an organization or government must allocate goods without collecting payment in return. This may pose a di¢ cult problem either when agents receiving those goods have private information in regards to their values or needs or when discriminating among agents using known di¤erences is not a viable option. In this paper, we …nd an optimal mechanism to allocate goods when the designer is benevolent. While the designer cannot charge agents, he can receive a costly but wasteful signal from them. We …nd conditions for which ignoring these costly signals by giving agents equal share (or using lotteries if the goods are indivisible) is optimal. In other cases, those that send the highest signal should receive the goods; however, we then show that there exist cases where more complicated mechanisms are superior. Finally, we show that the optimal mechanism is independent of the scarcity of the goods being allocated.

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“…[3] compared auctions, lotteries, and queues under deterministic demand and identified conditions for non-market assignment rules to be majority preferred. And [4] and [5] compared the expected efficiency of lotteries and queues under stochastic demand, whereby individual private valuations are drawn independently from a common distribution, and both concluded lotteries are superior if the good is relatively scarce and individual private values and time costs are sufficiently homogenous or negatively correlated.…”

Section: Introductionmentioning

confidence: 99%

Optimal (Under-)Pricing and Allocation of Publicly Provided Goods

Scrogin¹

2017

TEL

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This paper exploits the links between a private value distribution's hazard rate, mean residual value, and eta functions in order to characterize postedprice rules for a public agency to allocate scarce units of an indivisible good under the utilitarian distributional objective of maximizing expected consumer surplus. Sufficient conditions on the monotonic and non-monotonic classes of the functions are established that identify either market assignment at the clearing price or lottery assignment with partial or complete underpricing as the optimal allocation mechanism. The results are summarized across a wide range of parametric value distributions, and selected non-monotonic cases are evaluated numerically to determine the relative scarcity or abundance of the good necessary for market or non-market assignment to dominate.

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Lottery or waiting-line auction?

Cited by 40 publications

References 15 publications

Hybrid allocation mechanisms for publicly provided goods

Hybrid allocation mechanisms for publicly provided goods

Optimal allocation without transfer payments

Optimal (Under-)Pricing and Allocation of Publicly Provided Goods

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