Cardinal Assignment Mechanisms: Money Matters More than it Should

• Authors: Antonio Miralles and Caterina Calsamiglia.
• BSE Working Paper: 110623 | January 20
• Keywords: random assignments , ordinal vs. cardinal mechanisms , outside options , unequal access
• JEL codes: D47, D63
• random assignments
• ordinal vs. cardinal mechanisms
• outside options
• unequal access

Most environments where (possibly random) assignment mechanisms are used are such that participants have outside options. For instance private schools and private housing are options that participants in a public choice or public housing assignment problems may have. We postulate that cardinal mechanisms, as opposed to ordinal mechanisms, may be unfair for agents with less access to outside options. Chances inside the assignment process could favor agents with better outside options.