How to Assign Scarce Resources Without Money: Designing Information Systems that are Efficient, Truthful, and (Pretty) Fair
Authors: Bichler, Martin; Hammerl, Alexander; Morrill, Thayer; Waldherr, Stefan
Journal: Information Systems Research (2021)
<jats:p> Matching with preferences has great potential to coordinate the efficient allocation of scarce resources in organizations when monetary transfers are not available. It is well known that it is impossible to combine all three properties of truthfulness, efficiency, and fairness (i.e., envy freeness) in matching with preferences. Established mechanisms are either efficient or envy free, and the efficiency loss in envy-free mechanisms is substantial. We focus on a widespread representative of a matching problem: course assignment where students have preferences for courses and organizers have priorities over students. An important feature in course assignment is that a course has a maximum capacity and a minimum required quota. This is also a requirement in many other matching applications, such as school choice, hospital-residents matching, or the assignment of workers to jobs. We introduce RESPCT, a mechanism that respects minimum quotas and is truthful, efficient, and has low levels of envy. The reduction in envy is significant and is due to two remarkably effective heuristics. We provide analytical and experimental results based on field data from a large-scale course as…