Efficient Lottery Design
There has been a surge of interest in stochastic assignment mechanisms that have proven to be theoretically compelling thanks to their prominent welfare properties. Contrary to stochastic mechanisms, however, lottery mechanisms are commonly used in real life for indivisible goods allocation. To help facilitate the design of practical lottery mechanisms, we provide new tools for obtaining stochastic improvements in lotteries. As applications, we propose lottery mechanisms that improve upon the widely used random serial dictatorship mechanism and a lottery representation of its competitor, the probabilistic serial mechanism. The tools we provide here can be useful in developing welfare-enhanced new lottery mechanisms for practical applications such as school choice.
We provide a new, welfarist, interpretation of the well-known Serial rule in the random assignment problem, strikingly different from previous attempts to define or axiomatically characterize this rule. For each agent i we define ti(k) to be the total share of objects from her first k indifference classes this agent i gets. Serial assignment is shown to be the unique one which leximin maximizes the vector of all such shares (ti(k)). This result is very general; it applies to non-strict preferences, and/or non-integer quantities of objects, as well. In addition, we characterize Serial rule as the unique one sd-efficient, sd-envy-free, and strategy-proof on the lexicographic preferences extension to lotteries. © 2015 Elsevier Inc. All rights reserved.
This article will analyze the activity of state-owned companies and their place in the structure of market relations from the standpoint of contemporary approaches to the study of “state failure” and “market failure”. It will also consider the implications of the systematic embedding of private property rights. In addition to considering the costs of the functions of state-owned companies, the authors address the actual experience of the Russian economy in the present day, the experience of forming state corporations and the risks associated with their operation. Particular attention will be paid to the inhibition of incentives to improve the general institutional environment and, conversely, to the increasing incidence of direct state intervention in matters that affect economic development. We will examine the various ways in which the growth of the public sector, de jure and de facto, reduces opportunities for implementing private property rights.
This article analyzes state-owned companies and their place in the structure of market interactions in the context of modern approaches to the study of government failures and market failures, as well as the conditions of the system of private property rights rooting. Besides the general theoretical consideration of the costs of functioning of state-owned companies, the authors refer to the specific experience of the Russian economy, consistently analyzing the opportunities and palliatives of the current privatization policy, the experience of establishment and the risks of functioning of state corporations. Particular attention is paid to the problem of limited motivation to improve the institutional environment in general and, on the contrary, the expansion of the practice of direct government intervention in order to solve the problems of economic development. The authors also consider specific areas where there is a restriction of private property rights in connection with the expansion of the public sector, de jure and de facto.
The maximum Nash welfare (MNW) solution — which selects an allocation that maximizes the product of utilities — is known to provide outstanding fairness guarantees when allocating divisible goods. And while it seems to lose its luster when applied to indivisible goods, we show that, in fact, the MNW solution is unexpectedly, strikingly fair even in that setting. In particular, we prove that it selects allocations that are envy free up to one good — a compelling notion that is quite elusive when coupled with economic efficiency. We also establish that the MNW solution provides a good approximation to another popular (yet possibly infeasible) fairness property, the maximin share guarantee, in theory and — even more so — in practice. While finding the MNW solution is computationally hard, we develop a nontrivial implementation, and demonstrate that it scales well on real data. These results lead us to believe that MNW is the ultimate solution for allocating indivisible goods, and underlie its deployment on a popular fair division website.
The paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2012. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.
The paper examines the principles for the supervision of financial conglomerates proposed by BCBS in the consultative document published in December 2011. Moreover, the article proposes a number of suggestions worked out by the authors within the HSE research team.