Thursday, December 5, 2013

Pete Troyan (job market candidate) on the rural hospital problem (among other things)

Among the economists I'm engaged with on the job market this year is Pete Troyan. You should think about hiring him.  His job market paper is

"Distributional constraints are important in many market design settings. Prominent examples include the minimum manning requirements at each branch in military cadet matching and diversity in school choice, whereby school districts impose constraints on the demographic distribution of students at each school. Standard assignment mechanisms implemented in practice are unable to accommodate all of these constraints. This leads policymakers to resort to ad-hoc solutions that eliminate blocks of seats ex-ante (before agents submit their preferences) to ensure that all constraints are satisfied ex-post. 

We show that these solutions ignore important information contained in the submitted preferences, resulting in avoidable inefficiency. We introduce a new class of dynamic quotas mechanisms that allow the institutional quotas to dynamically adjust to the submitted preferences of the agents. We show how a wide class of mechanisms commonly used in the field can be adapted to our dynamic quotas framework. Focusing in particular on a new dynamic quotas deferred acceptance (DQDA) mechanism, we show that DQDA Pareto dominates current solutions. While it may seem that allowing the quotas to depend on the submitted preferences would compromise the strategyproofness of deferred acceptance, we show that this is not the case: as long as the order in which the quotas are adjusted is determined exogenously to the preferences, DQDA remains strategyproof. Thus, policymakers can be confident that efficiency will be improved without introducing perverse incentives. Simulations with school choice data are used to quantify the potential efficiency gains."

I'll get a chance to blog about another of his papers when I post on Dan Fragiadakis, as they have another joint paper (an experiment) that is Dan's job market paper.

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