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Dynamic Allocation without Money

Guo, Yingni and Hörner, Johannes (2020) Dynamic Allocation without Money. TSE Working Paper, n. 20-1133, Toulouse

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We analyze the optimal design of dynamic mechanisms in the absence of transfers.
The agent’s value evolves according to a two-state Markov chain. The designer uses future allocation decisions to elicit private information. We solve for the optimal allocation mechanism. Unlike with transfers, efficiency decreases over time. In the long run, polarization occurs. A simple implementation is provided. The agent is endowed with a “quantified entitlement,” corresponding to the number of units he is entitled to claim in a row.

Item Type: Monograph (Working Paper)
Language: English
Date: August 2020
Place of Publication: Toulouse
Uncontrolled Keywords: mechanism design, principal-agent, quota mechanism, token budget
JEL Classification: C73 - Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
D82 - Asymmetric and Private Information
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 31 Aug 2020 13:49
Last Modified: 31 Aug 2020 13:49
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