Location: 368A Heady Hall
Description: Valentin Verdier
"Welfare effects of dynamic assignment without money: An empirical analysis"
Abstract: Assignment mechanisms that do not rely on monetary transfers guarantee equitable access but may yield inefficient allocations. Theory suggests that linking assignment over time can mitigate this issue, while the magnitude of these efficiency gains is an empirical question in most settings. We study a dynamic assignment mechanism used by the Michigan Department of Natural Resources to allocate bear hunting permits and find that it yields a more efficient allocation than a static mechanism both by inducing participants to be more selective and by allowing participants with a higher valuation for hunting to obtain a permit more frequently. On the other hand we find that the social welfare achieved by this dynamic assignment mechanism is still significantly lower than the maximized social welfare of an efficient auction, pointing to the empirical importance of heterogeneity across participants and resources in determining the efficiency of a dynamic assignment mechanism.
Contact Person: Otavio Bartalotti