Constrained Pseudo-Market Equilibrium

S-Tier
Journal: American Economic Review
Year: 2021
Volume: 111
Issue: 11
Pages: 3699-3732

Authors (3)

Federico Echenique (University of California-Berke...) Antonio Miralles (not in RePEc) Jun Zhang (not in RePEc)

Score contribution per author:

2.681 = (α=2.01 / 3 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We propose a pseudo-market solution to resource allocation problems subject to constraints. Our treatment of constraints is general: including bihierarchical constraints due to considerations of diversity in school choice, or scheduling in course allocation; and other forms of constraints needed to model, for example, the market for roommates, combinatorial assignment problems, and knapsack constraints. Constraints give rise to pecuniary externalities, which are internalized via prices. Agents pay to the extent that their purchases affect the value the of relevant constraints at equilibrium prices. The result is a constrained-efficient market-equilibrium outcome. The outcome is fair to the extent that constraints treat agents symmetrically.

Technical Details

RePEc Handle
repec:aea:aecrev:v:111:y:2021:i:11:p:3699-3732
Journal Field
General
Author Count
3
Added to Database
2026-01-25