Constraints on Matching Markets Based on Moral Concerns
Abstract:
Many markets enforce bans on monetary transfers driven by concerns that wealthier people may have better access to resources. This study discusses the appropriateness of banning transfers as a solution to address such inequality concerns. We examine an assignment problem involvin g agents with heterogeneous wealth endowments and preferences with positive income effects. To address the inequality concerns, we introduce discrimin ation-freeness as a constraint. Discrimination-freeness requires that the a llocation of objects is independent of individuals’ wealth endowments. We s how that for significant large wealth inequalities, money is needed for eff iciency. However, a market designer who must not use monetary transfers fac es the same restrictions for the allocation of resources as a designer who is bound by discrimination-freeness. For small wealth inequalities, the res ults are different. Depending on the structure of the preference space, eff iciency either can either be reached without using transfers or the market designer can use money to trade off cardinalities without violating discrim ination-freeness.
DTSTAMP:20260423T043832Z DTSTART:20241023T130000Z DTEND:20241023T140000Z SEQUENCE:0 TRANSP:OPAQUE END:VEVENT END:VCALENDAR