Research
Research
Abstract: We study the welfare consequences of merging Shapley–Scarf markets. Market integration can lead to large welfare losses and make the vast majority of agents worse off, but is on average welfare-enhancing and makes all agents better off ex-ante. The number of agents harmed by integration is a minority when all markets are small or agents' preferences are highly correlated.
Abstract: Admissions to technical colleges in India feature a multi-period matching process and are subject to a complex affirmative action policy. At each period, an assignment is produced and applicants decide whether to finalize their assignments or participate in the next period with the possibility of updating their submitted rank-ordered lists (ROLs). Building on Haeringer and Iehl´e (2021), we formulate a multi-period college admissions problem where institutions’ choice rules incorporate affirmative action restrictions and are updated consistently. We show that it is safe for applicants to participate in additional periods when their updating rule on ROLs satisfy a mild regularity condition. We also introduce a backward-looking notion of stability for multi-period matching mechanisms that consider affirmative action constraints. We use our results to analyze the multi-stage mechanism currently used in admissions to engineering colleges in India.
Abstract: This paper introduces a new procedure of decision-making that relies on the idea of rejection. Departing from the standard model of preference maximizing, the decision maker (DM) in our model rejects the set of minimal alternatives for any decision problem using an underlying binary relation. We axiomatically study the correspondence of non-rejected alternatives which we call the acceptable correspondence with different rationality conditions on the underlying preference relation. We also generalize our model to acceptable correspondences that are generated by the successive elimination of minimal alternatives. We find that the rejection approach developed in this chapter can offer explanations for various anomalies observed in decision theory, such as the two-decoy effect or the two-compromise effect.
Abstract: We propose a boundedly rational model of choice where agents eliminate dominated alternatives using a transitive rationale before making a choice using a complete rationale. We analyze the model through reversals in choice and provide its behavioral characterization. The procedure satisfies a weaker version of the Weak Axiom of Revealed Preference (WARP) allowing for at most two reversals in choice in terms of set inclusion for any pair of alternatives. We show that the underlying rationales can be identified from the observable reversals. We also characterize a variant of this model in which both the rationales are transitive.