Efficient and fair trading mechanisms for resource exchange in market design

TL;DR

This paper introduces a flexible method using parameterized linear equations to design trading mechanisms that achieve efficiency and fairness across various market design models, even with complex constraints.

Contribution

It presents a novel, adaptable approach to creating trading mechanisms that handle complex endowments and fairness considerations in market design.

Findings

Developed a parameterized linear equation method for trading mechanisms.

Achieved mechanisms that are both efficient and fair in multiple models.

Demonstrated flexibility in incorporating fairness concerns.

Abstract

We develop a method using parameterized linear equations to define trading mechanisms in market design models. Our method adeptly addresses challenges arising from factors such as complex endowments or coarse priorities, while offering flexibility to incorporate fairness concerns through the selection of equation parameters. Applying this method to models including fractional endowment exchange, priority-based allocation, and house allocation with existing tenants, we obtain new mechanisms that are both efficient and fair in these models.