Tiered Housing Allocation with Preannounced Rankings: An Experimental Analysis

28 Pages Posted: 20 Jan 2016

See all articles by Juan D. Carrillo

Juan D. Carrillo

University of Southern California - Department of Economics; Centre for Economic Policy Research (CEPR)

Saurabh Singhal

United Nations - World Institute for Development Economics Research (UNU/WIDER)

Date Written: Spring 2016

Abstract

We study in the laboratory a variant of the house allocation with existing tenants problem where subjects are partitioned into tiers with hierarchical privileges, and they know their position in the priority queue before making their decision. We evaluate the performance of the modified versions of three well‐known mechanisms: Top Trading Cycle (TTC), Gale‐Shapley, and Random Serial Dictatorship (RSD) with Squatting Rights. For all three mechanisms, we find low rates of participation (around 40%), high rates of truth‐telling conditional on participation (around 90%), high proportions of fair allocations (above 90%), and significant efficiency losses. We also observe differences across mechanisms: RSD is ranked highest in efficiency and TTC is ranked lowest in fairness. We then show that position in the queue has a positive and significant impact on participation whereas tier has little effect on behavior. Finally, the individual analysis reveals that the majority of subjects who do not play according to the theory still follow discernible patterns of participation and preference revelation.

Suggested Citation

Carrillo, Juan D. and Singhal, Saurabh, Tiered Housing Allocation with Preannounced Rankings: An Experimental Analysis (Spring 2016). Journal of Economics & Management Strategy, Vol. 25, Issue 1, pp. 133-160, 2016, Available at SSRN: https://ssrn.com/abstract=2718666 or http://dx.doi.org/10.1111/jems.12143

Juan D. Carrillo (Contact Author)

University of Southern California - Department of Economics ( email )

3022 S. Vermont Ave.
Los Angeles, CA 90089
United States
213-740-3526 (Phone)
213-740-8543 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Saurabh Singhal

United Nations - World Institute for Development Economics Research (UNU/WIDER) ( email )

Katajanokanlaituri 6B
Helsinki, FIN-00160
Finland

HOME PAGE: http://www.wider.unu.edu/aboutus/people/resident-researchers/en_GB/Saurabh-Singhal/

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
0
Abstract Views
184
PlumX Metrics