Visibly Fair Mechanisms

TL;DR

This paper introduces visible fairness, a new concept generalizing serial dictatorship, which balances fairness and strategy-proofness in priority-based allocation mechanisms, highlighting a trade-off with information efficiency.

Contribution

It characterizes visible fairness mechanisms, provides conditions for strategy-proofness, and designs rules satisfying distributional objectives while analyzing the associated information-efficiency trade-off.

Findings

Visibly fair mechanisms generalize serial dictatorship.

Necessary and sufficient conditions for strategy-proofness are established.

Designs satisfy broad distributional objectives with a trade-off in information elicitation.

Abstract

Priority-based allocation of individuals to positions are pervasive, and elimination of justified envy is often, an absolute requirement. This leaves serial dictatorship (SD) as the only rule that avoids justified envy under standard direct mechanisms. What if SD outcomes are undesirable from a designer's perspective? We propose visible fairness, which demands fairness relative to the (potentially purposefully incomplete) preference information the mechanism elicits. Visibly fair mechanisms generalize SD; we fully characterize them and provide necessary and sufficient conditions for strategy-proofness. We show how to apply these results to design strategy-proof visibly fair rules that satisfy a broad class of distributional objectives. Visible fairness, however, results in a new information-efficiency trade-off: meeting distributional goals leads to the avoidance of eliciation of information about preferences that could prevent inefficiencies.