What preferences are revealed by market designs? by Oğuzhan Çelebi

Oğuzhan Çelebi is on the job market this year (listed on the job market websites of both MIT and Stanford where he's finishing a two year postdoc). He has a new paper that takes a really novel approach to market design.  It looks at the implicit preference relation (if one exists) that a mechanism reveals when a revealed preference analysis is done of the choices it makes from different possible menus of alternatives. The specific focus is on preferences for diversity revealed by mechanisms used in connection with affirmative action.

Diversity Preferences and Affirmative Action, by Oğuzhan Çelebi 

Abstract: "In various contexts, institutions allocate resources using rules that determine selections given the set of candidates. Many of these rules feature affirmative action, accounting for both identity and (match) quality of individuals. This paper studies the relationship between these rules and the preferences underlying them. I map the standard setting of market design to the revealed preference framework, interpreting choice rules as observed choices made across different situations. I provide a condition that characterizes when a rule can be rationalized by preferences based on identities and qualities. I apply tests based on this condition to evaluate real-world mechanisms, including India’s main affirmative action policy for allocating government jobs, and find that it cannot be rationalized. When identities are multidimensional, I show that non-intersectional views of diversity can be exploited by dominant groups to increase their representation and cause the choice rules to violate the substitutes condition, a key requirement for the use of stable matching mechanisms. I also characterize rules that can be rationalized by preferences separable in diversity and quality, demonstrating that they lead to a unique selection within the broader set of policies that reserve places based on individuals’ identities."

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He's a target of opportunity for any department interested in market design.