Working papers

How to avoid black markets for appointments with online booking systems

(with Philipp Heller, Dorothea Kübler, and Morimitsu Kurino)

Abstract: Allocating appointment slots is presented as a new application for market design. We consider online booking systems that are commonly used by public authorities to allocate appointments for driver’s licenses, visa interviews, passport renewals, etc. We document that black markets for appointments have developed in many parts of the world. Scalpers book the appointments that are offered for free and sell the slots to appointment seekers. We model the existing first-come-first-served booking system and propose an alternative system. The alternative system collects applications for slots for a certain time period and then randomly allocates slots to applicants. We investigate the two systems under conditions of low and high demand for slots. The theory predicts and lab experiments confirm that scalpers profitably book and sell slots under the current system with high demand, but that they are not active in the proposed new system under both demand conditions.

Transparency in centralised allocation

(with Madhav Raghavan)

Abstract: Non-transparency in public allocation can be costly if participants doubt the legitimacy of their assignments. We provide practical ways to increase transparency in admissions, auctions and house allocation. We model transparency in terms of the information acquired by participants through both their first-hand experience of the mechanism and from direct communication from the designer. Our approach unites the use of both dynamic mechanisms as well as of published cutoffs and dropout prices. In a school admissions laboratory experiment, we vary the degree of transparency of deferred acceptance environments and use the correctness of subjects' appeal decisions as a novel experimental measure of transparency.

Abstract: Previous studies of charitable giving have focused on middle or higher income earners in Western countries, neglecting the poor. Despite this focus, the lowest income groups are often shown to contribute substantial shares of their income to charitable causes. In a large-scale natural field experiment with over 180,000 clients of a micro-lending company in Kyrgyzstan, we study charitable giving by a population that is much poorer relative to the typical donors that have been studied so far. In a 2x2 design, we explore two main hypotheses about giving by the poor: (i) that they are more price sensitive and (ii) that they care about their proximity to the charitable project. We find evidence in favor of the former hypothesis but not of the latter.

Pick-an-object mechanisms

(with Inácio Bó)

Abstract: We introduce a new family of mechanisms for one-sided matching markets, denoted pick-an-object (PAO) mechanisms. When implementing an allocation rule via PAO, agents are asked to pick an object from individualized menus. These choices may be rejected later on, and these agents are presented with new menus. When the procedure ends, agents are assigned the last object they picked. We characterize the allocation rules that can be sequentialized by PAO mechanisms, as well as the ones that can be implemented in a robust truthful equilibrium. We justify the use of PAO as opposed to direct mechanisms by showing that its equilibrium behavior is closely related to the one in obviously strategy-proof (OSP) mechanisms, while expanding the domain of rules that can be implemented to include commonly used ones, such as Gale-Shapley DA and Top Trading Cycles. We run laboratory experiments comparing truthful behavior when using PAO, OSP, and direct mechanisms to implement different rules. These indicate that individuals are more likely to behave in line with the theoretical prediction under PAO and OSP implementations than their direct counterparts.

Abstract: The last few years have seen an increasing use of sequential online mechanisms, instead of the traditional direct counterparts, in college admissions in countries such as Germany, Brazil, and China. We describe those, and identify shortcomings in terms of incentives and outcome properties they have. We introduce a new family of mechanisms for one-sided matching markets, which improve upon these shortcomings. Unlike most mechanisms available in the literature, which ask students for a full preference ranking over all colleges, they are instead sequentially asked to make choices or submit partial rankings from sets of colleges. These are used to produce, in each step, a tentative allocation. If at some point it is determined that a student cannot be accepted into a college anymore, then she is asked to make another choice among those which would tentatively accept her. Participants following the simple strategy of choosing the most preferred college in each step is a robust equilibrium that yields the Student Optimal Stable Matching.

Abstract: We conduct a field experiment with 302 workers of the microcredit company in Russia to study the effects of the different designs of a contest for monetary prizes at the workplace. We consider a standard all-pay auction design with two and four prizes of different size and compare it to “parallel” contests with the same prizes, but where participants have to choose the prize prior to the start of the competition and then the winner is selected only among the players who chose the same prize. Despite the theoretical predictions, the parallel contests lead to higher efforts for all players, but mainly by lower-ability players. Division of prizes leads to the predicted effects. In parallel contests, too many players choose the higher prize than equilibrium suggests. Overall, the parallel version of contests appeared to be more profitable for the firm.

Current projects

Information acquisition in centralised college admissions

(with Dorothea Kübler and Siqi Pan)

Parallel markets in school choice: An experimental study

(with Bertan Turhan and Piotr Evdokimov)

Overconfidence of CEOs and founders and the performance of start-ups.

(with Annamaria Conti)