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Title: The Multi-unit Assignment Problem: Theory and Evidence from Course Allocation at Harvard

Author(s): Eric Budish and Estelle Cantillon

Publication Date: January 2010

Keyword(s): course allocation, dictatorship, ex-ante efficiency, ex-post efficiency, field data, market design, multi-unit assignment, random serial dictatorship, strategic behaviour and strategyproofness

Programme Area(s): Industrial Organization

Abstract: This paper uses data consisting of students' strategically reported preferences and their underlying true preferences to study the course allocation mechanism used at Harvard Business School. We show that the mechanism is manipulable in theory, manipulated in practice, and that these manipulations cause meaningful welfare losses. However, we also find that ex-ante welfare is higher than under the strategyproof and ex-post efficient alternative, the Random Serial Dictatorship. We trace the poor ex-ante performance of RSD to a phenomenon specific to multi-unit assignment, "callousness". We draw lessons for the design of multi-unit assignment mechanisms and for market design more broadly.

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Bibliographic Reference

Budish, E and Cantillon, E. 2010. 'The Multi-unit Assignment Problem: Theory and Evidence from Course Allocation at Harvard'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=7641