American Economic Review Vol. 102 No. 5 2012

The Multi-unit Assignment Problem: Theory and Evidence from Course Allocation at Harvard

Eric Budish¹; Estelle Cantillon²

¹ University of Chicago Booth School of Business, 5807 S. Woodlawn Avenue, Chicago, IL 60637. · ² Université Libre de Bruxelles, Solvay Brussels School of Economics and Management and ECARES, 50 Av. FD Roosevelt, CP 114/04, B-1050 Brussels, Belgium.

Abstract

We use theory and field data to study the draft mechanism used to allocate courses at Harvard Business School. We show that the draft is manipulable in theory, manipulated in practice, and that these manipulations cause significant welfare loss. Nevertheless, we find that welfare is higher than under its widely studied strategyproof alternative. We identify a new link between fairness and welfare that explains why the draft performs well despite the costs of strategic behavior, and then design a new draft that reduces these costs. We draw several broader lessons for market design, regarding Pareto efficiency, fairness, and strategyproofness.

DOI

10.1257/aer.102.5.2237

Volume

102

Issue

5

Pages

2237-2271

Language

en

Sources

openalex bibtex:phds-export.bib crossref

Cite

APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓