group incentive compatibility in a market with indivisible goods abstract in a market where each trader has one unit of an indivisible good there are procedures for exchanging goods which result in competitive allocations one of these procedures the top trading cycle has the property that it is in each trader s best interest to report his true preferences over the set of goods this note shows that no subset of traders can misrepresent their preferences and improve the allocation for all members of the subset additionally if there are no indifferences in the preferences then some traders in a subset that misrepresents preferences do worse

the effects of welfare and tax reform the material well being of single mothers in the 1980s and 1990s abstract the tax and welfare programs that provide income and in kind benefits to single mothers have changed dramatically in recent years these changes began as far back as the mid 1980s and culminated with the 1996 welfare law that ended welfare as we knew it these tax and welfare changes have sharply increased the employment of single mothers and cut welfare rolls however little is know about the effects of these policy changes on the material well being of single mothers and their children studies of those leaving welfare have found that a substantial percentage have problems paying rent purchasing enough food and paying utility bills other studies found a decline in income among the worst off single mothers after 1994 or 1995 the goal of this paper is to examine the material well being of single mothers and their families before and after recent welfare and tax reforms using data from two nationally representative household surveys we examine the consumption patterns of single mothers and their families from 1984 2000 we find that the material conditions of single mothers did not decline in recent years either in absolute terms or relative to single childless women or married mothers this pattern holds for the average single mother as well as for low educated single mothers at both the 15th and 25th percentiles of the consumption distribution in most cases our evidence suggests that the material conditions of single mothers have improved slightly

oligopolistic markets with sequential search and production cost uncertainty this article analyzes a sequential search model where firms face identical but stochastic production costs the realizations of which are unknown to consumers we characterize a perfect bayesian equilibrium satisfying a reservation price property and provide a sufficient condition for such an equilibrium to exist we show that i firms set on average higher prices and make larger profits compared to the scenario where consumers observe production costs ii expected prices and consumer welfare can be non monotonic in the number of firms and iii the impact of production cost uncertainty vanishes as the number of firms becomes very large

boston versus deferred acceptance in an interim setting an experimental investigation abstract while much of the school choice literature advocates strategyproofness recent research has aimed to improve efficiency using mechanisms that rely on non truthtelling equilibria we address two issues that arise from this approach we first show that even in simple environments with ample feedback and repetition agents fail to reach non truthtelling equilibria we offer another way forward implementing truth telling as an ordinal bayes nash equilibrium rather than as a dominant strategy equilibrium we show that this weaker solution concept can allow for more efficient mechanisms in theory and provide experimental evidence that this is also the case in practice in fact truth telling rates are basically the same whether truthtelling is implemented as an ordinal bayes nash equilibrium or a dominant strategy equilibrium this provides a proof of concept that ordinal bayes nash design might provide a middle path achieving efficiency gains over strategy proof mechanisms without relying on real life agents playing a non truth telling equilibrium

the determinants of welfare participation of female heads of household in canada this paper assesses the impact on the probability of welfare participation of budget constraint variables such as the expected wage welfare benefit level and implicit welfare tax rate the empirical results are based on a model of welfare participation that is estimated using a sample of female heads of household in canada the coefficients on the budget constraint variables are significant and carry signs that are generally consistent with the predictions of the model and the results of related studies based on data from the united states in addition to the budget constraint variables which include important policy tools a wide range of sociodemographic variables are included in the specification

optimal search learning and implementation we characterize the incentive compatible constrained efficient policy second best in a dynamic matching environment where impatient privately informed agents arrive over time and where the designer gradually learns about the distribution of agents values we also derive conditions on the learning process ensuring that the complete information dynamically efficient allocation of resources first best is incentive compatible our analysis reveals and exploits close formal relations between the problem of ensuring implementable allocation rules in our dynamic allocation problems with incomplete information and learning and between the classical problem posed by rothschild 1974 20 of finding optimal stopping policies for search that are characterized by a reservation price property

managerial turnover in a changing world we develop a dynamic theory of managerial turnover in a world in which the quality of the match between a firm and its managers changes stochastically over time shocks to managerial productivity are anticipated at the time of contracting but privately observed by the managers our key positive result shows that the firm s optimal retention decisions become more permissive with time our key normative result shows that compared to what is efficient the firm s contract induces either excessive retention at all tenure levels or excessive firing at the early stages of the relationship followed by excessive retention after sufficiently long tenure

women on welfare a macroeconomic analysis look at the dramatic change in family structure that has occurred recently illustrated in figure 1 in the united states 23 percent of children lived with an unwed mother in 1998 compared with only 8 percent in 1960 1 of this 15 percentage point increase about 6 percentage points are due to a rise in the rate of divorce the remaining 9 percentage points arise from an increase in out of wedlock births why care about this change in the structure of families the lot of children living with a single mother is bleak about 70 percent of those children in a family with a never married mother were living near or below the poverty level in 1995 the corresponding figure for children being raised by a divorced mother was 45 percent associated with the increase in number of single mothers has been a rise in the percentage of the population on welfare in 1960 only 1 7 percent of the population was on afdc aid to families with dependent children while in 1995 about 5 2 percent were most mothers who received afdc were single 71 percent were in 1993 also afdc mothers tended to have more children 2 6 on average vs 2 1 for the population as a whole in 1993 it is interesting to note that there is evidence suggesting that more entrances into and exits out of welfare are connected with a shift in family structure rather than with a change in employment status for instance of the first time entrances into welfare during 1983 1991 about 21 percent were associated with an out of wedlock birth 23 percent were connected with a divorce or separation and 21 percent were linked with a reduction in the mother s work hours last real afdc benefits rose by about 70 percent between 1945 and 1977 they were about 25 percent higher in 1995 than in 1945 could this have contributed to the rise in single motherhood the task here is to outline a general equilibrium model in which at any point in time some individuals will marry others will divorce and yet others will choose to have out of wedlock births while the model is still prototypical in nature it will be shown how such a framework can be used to address public policy questions in particular the impact of welfare on family structure and the well being of the economy

bargaining over babies theory evidence and policy implications it takes a woman and a man to make a baby this fact suggests that for a birth to take place the parents should first agree on wanting a child using newly available data on fertility preferences and outcomes we show that indeed babies are likely to arrive only if both parents desire one and there are many couples who disagree on having babies we then build a bargaining model of fertility choice and match the model to data from a set of european countries with very low fertility rates the distribution of the burden of child care between mothers and fathers turns out to be a key determinant of fertility a policy that lowers the child care burden specifically on mothers can be more than twice as effective at increasing the fertility rate compared to a general child subsidy

optimal selling strategies when to haggle when to hold firm a seller encountering risk neutral buyers one at a time should if commitments are feasible quote a single take it or leave it price to each this strategy is superior to any other for finite or infinite buyer populations whether there is learning or the distribution of buyer prices is known at the outset with one object for sale or many although haggling may offer advantages in terms of price discrimination these gains are more than offset by the losses it generates by encouraging buyers to refuse purchases at high prices

strategy proofness and essentially single valued cores revisited abstract we consider general allocation problems with indivisibilities where agents preferences possibly exhibit externalities in such contexts many different core notions were proposed one is the individually rational core ir core whereby blocking is only allowed via allocations where the non blocking agents receive their endowments we show that if there exists an allocation rule satisfying individual rationality efficiency and strategy proofness then for any problem for which the ir core is non empty the allocation rule must choose an ir core allocation and all agents are indifferent between all allocations in the ir core we further show that the result cannot be generalized to supersets of the ir core we apply our result to housing markets coalition formation and networks

taxes and marriage a two sided search analysis this article analyzes the effects of differential tax treatment of married and single individuals in the united states on marriage formation and composition divorce and labor supply we develop a marriage market model with search frictions and heterogeneous agents that is sufficiently rich to capture key elements of the problem under consideration we then calibrate the model and use it to evaluate the quantitative effects of several tax reforms aimed at making the tax law neutral with respect to marital status we find that these reforms i systematically increase the labor supply of married females with changes ranging from 0 3 to 10 1 percent ii have substantial effects on the correlation of spouses incomes which changes from 0 2 to values between 0 185 and 0 334 iii can lead to either an increase or decrease in the fraction of people married with changes that range from 0 6 to 2 4 percent

optimal adaptive price search consider the problem of a consumer desiring to buy a good which is sold at a variety of prices such a buyer will be able to obtain a sequence of price quotations from various sellers when should the buyer stop searching for a lower price if he continues he may obtain a lower price but he incurs additional time effort and expense in searching the optimal price search decision is one of balancing the expectation of a possibly lower price obtained by continued search against cumulative costs from search when the prices arise from a known probability distribution the optimal search strategy has certain well defined and desirable properties in the more realistic case that the buyer has only partial information about the price distribution and must update his beliefs after observing prices in the marketplace the problem becomes more complex and search strategies become less well behaved the major purpose of this article is to determine new conditions under which optimal policies have these desirable characteristics in the case where the consumer possesses only incomplete information about the distribution of prices price quotations he receives in addition to providing him with price possibilities provide him with information about that distribution rothschild 151 in citing an unpublished paper of gastwirth has noted that small specification errors for an assumed distribution can lead to substantial changes in expected number of searches and expected cost consequently the assumption of a known distribution of prices can have a profound effect on total cost 1 0022 053 l 8 l 040001 20 02 00 o

transferring ownership of public housing to existing tenants a market design approach this paper explores a housing market with an existing tenant in each house and where the existing tenants initially rent their houses the idea is to identify equilibrium prices for the housing market given the prerequisite that a tenant can buy any house on the housing market including the one that he is currently possessing or continue renting the house he is currently occupying the main contribution is the identification of an individually rational equilibrium selecting and group non manipulable price mechanism in a restricted preference domain that contains almost all preference profiles in this restricted domain the identified mechanism is the minimum price equilibrium selecting mechanism that transfers the maximum number of ownerships to the existing tenants we also relate the theoretical model and the main findings to the u k housing act 1980 whose main objective is to transfer ownerships of houses to existing tenants

priority auctions and queue disciplines that depend on processing time we analyze the allocation of priority in queues via simple bidding mechanisms in our model the stochastically arriving customers are privately informed about their own processing time they make bids upon arrival at a queue whose length is unobservable we consider two bidding schemes that differ in the definition of bids these may reflect either total payments or payments per unit of time and in the timing of payments before or after service in both schemes a customer obtains priority over all customers waiting in the queue or arriving while he is waiting who make lower bids our main results show how the convexity concavity of the function expressing the costs of delay determines the queue discipline i e shortest processing time first spt longest processing time first lpt arising in a bidding equilibrium

general equilibrium treatment effects a study of tuition policy this paper defines and estimates general equilibrium treatment effects the conventional approach in the literature on treatment effects ignores interactions among individuals induced by the policy interventions being studied focusing on the impact of tuition policy and using estimates from our dynamic overlapping generations general equilibrium model of capital and human capital formation we find that general equilibrium impacts of tuition on college enrollment are an order of magnitude smaller than those reported in the literature on microeconomic treatment effects the assumptions used to justify the late parameter in a partial equilibrium setting do not hold in a general equilibrium setting policy changes induce two way flows we extend the late concept to a general equilibrium setting we present a more comprehensive evaluation to program evaluation by considering both the tax and benefit consequences of the program being evaluated and placing the analysis in a market setting this abstract was borrowed from another version of this item

auctions with online supply abstract online advertising auctions present settings in which there is uncertainty about the number of items for sale we study mechanisms for selling identical items when the total supply is unknown but is drawn from a known distribution items arrive dynamically and the seller must make immediate allocation and payment decisions with the goal of maximizing social welfare we devise a simple incentive compatible mechanism that guarantees some constant fraction of the first best solution a surprising feature of our mechanism is that it artificially limits supply and we show that limiting the supply is essential for obtaining high social welfare although common when maximizing revenue commitment to limit the supply is less intuitive when maximizing social welfare the performance guarantee of our mechanism is in expectation over the supply distribution we show that obtaining similar performance guarantee for every realization of supply is impossible

more on marriage fertility and the distribution of income according to pareto 1896 the distribution of income depends on the nature of the people comprising a society on the organization of the latter and also in part on chance in the model developed here the nature of the people is captured by attitudes toward marriage divorce fertility and children singles search for mates in a marriage market married agents bargain about work and the quantity and quality of children they can divorce social policies such as child support requirements reflect the organization of the society finally chance is modeled by randomness in income marriage opportunities and marital bliss

reservation prices in optimal stopping in an optimal stopping problem where bids on an asset are received conditions are given that ensure the so called reservation price property namely if a certain price is accepted then any higher price would also have been accepted at that point in time the approach followed in this paper is similar to that pursued by d b rosenfield and r d shapiro in 1981

rising inequality changes in the distribution of income and consumption in the 1980s this paper examines changes in the distribution of income and consumption in the united states during the 1980s using data from the current population survey income and consumer expenditure survey consumption we reach three primary conclusions first changes in the distribution of consumption parallel changes in the distribution of income the lowest quintile of the consumption distribution received 0 9 percentage points less of total consumption in 1988 than in 1980 the corresponding decline for income was 0 6 percentage points second broad conclusions concerning recent changes in the consumption distribution are not very sensitive to the exact choice of a measure of family needs under a wide variety of alternative household equivalence scales there is a widening in the consumption distribution in the 1980s third the usc of consumption measures of well being in place of measures based on current money income docs change conclusions concerning the extent of poverty in the united stales using the official federal poverty thresholds we find that the overall consumption poverty rate was three percentage points below the income poverty rate in 1988 comparisons of the poverty rates of the elderly and the non elderly are substantially affected by the choice of poverty measure the consumption poverty rare for the elderly was only 60 percent of the rate for adults and one third of the rate for children in 1988 this abstract was borrowed from another version of this item

the quantitative role of child care for female labor force participation and fertility consistent with facts for a cross section of oecd countries i document that the labor force participation rate of west german mothers with children aged zero to two exceeds the corresponding child care enrollment rate whereas the opposite is true for mothers with children aged three to mandatory school age i develop a life cycle model that explicitly accounts for this age dependent relationship through various types of non paid and paid child care the calibrated version of the model is used to evaluate two policy reforms concerning the supply of subsidized child care for children aged zero to two these counterfactual policy experiments suggest that the lack of subsidized child care constitutes indeed for some females a barrier to participate in the labor market and depresses fertility

an efficient dynamic mechanism this paper constructs an efficient budget balanced bayesian incentive compatible mechanism for a general dynamic environment with quasilinear payoffs in which agents observe private information and decisions are made over countably many periods first under the assumption of private values other agents private information does not directly affect an agent s payoffs we construct an efficient ex post incentive compatible mechanism which is not budget balanced second under the assumption of independent types the distribution of each agent s private information is not directly affected by other agents private information we show how the budget can be balanced without compromising agents incentives finally we show that the mechanism can be made self enforcing when agents are sufficiently patient and the induced stochastic process over types is an ergodic finite markov chain publication abstract

strategyproof assignment by hierarchical exchange we give a characterization of the set of group strategyproof pareto optimal and reallocation proof allocation rules for the assignment problem where individuals are assigned at most one indivisible object without any medium of exchange although there are no property rights in the model the rules satisfying the above criteria imitate a trading procedure with individual endowments in which individuals exchange objects from their hierarchically determined endowment sets in an iterative manner in particular these assignment rules generalize gale s top trading cycle procedure the classical rule for the model in which each individual owns an indivisible good

sorting through search and matching models in economics toward understanding assortative matching this is a self contained introduction to research on search and matching we first explore the nontransferable and perfectly transferable utility matching paradigms and then a unifying imperfectly transferable utility matching model motivated by some unrealistic predictions of frictionless matching we flesh out the foundational economics of search theory we then revisit the original matching paradigms with search frictions we finally allow informational frictions that often arise such as in college student sorting

estimating welfare effects consistent with forward looking behavior part i lessons from a simulation exercise an extensive literature in economics seeks to determine the quantitative impact of welfare benefits on economic and demographic behaviors most studies adopt a static choice framework to motivate their empirical specifications the behaviors that are studied however have both immediate and long term consequences if potential welfare recipients are forward looking they will consider these long term consequences when making current decisions in this paper we investigate the implications of the existence of forward looking behavior for estimation methodology in the companion paper that follows we estimate the effect of welfare on those decisions adopting an empirical specification that is consistent with forward looking behavior and interpretable within that framework

optimal pricing mechanisms with unknown demand the standard profit maximizing multi unit auction intersects the submitted demand curve with a preset reservation supply curve which is determined using the distribution from which the buyers valuations are drawn however when this distribution is unknown a preset supply curve cannot maximize monopoly profits the optimal pricing mechanism in this situation sets a price to each buyer on the basis of the demand distribution inferred statistically from other buyers bids the resulting profit converges to the optimal monopoly profit with known demand as the number of buyers goes to infinity and convergence can be substantially faster than with sequential price experimentation

intergenerational persistence of earnings the role of early and college education recent empirical evidence from the united states indicates a high degree of persistence in earnings across generations designing effective public policies to increase social mobility requires identifying and measuring the major sources of persistence and inequality in earnings we provide a quantitative model of intergenerational human capital transmission that focuses on three sources innate ability early education and college education we find that approximately one half of the intergenerational correlation in earnings is accounted for by parental investment in education in particular early education we show that these results have important implications for education policy

obviously strategy proof mechanisms what makes some strategy proof mechanisms easier to understand than others to address this question i propose a new solution concept a mechanism is obviously strategy proof osp if it has an equilibrium in obviously dominant strategies this has a behavioral interpretation a strategy is obviously dominant if and only if a cognitively limited agent can recognize it as weakly dominant it also has a classical interpretation a choice rule is osp implementable if and only if it can be carried out by a social planner under a particular regime of partial commitment i fully characterize the set of osp mechanisms in a canonical setting with one dimensional types and transfers a laboratory experiment tests and corroborates the theory

an untold story the characteristics of welfare use in british columbia the dynamics of welfare participation are analyzed using a unique longitudinal data set derived from provincial administrative records over the period 1980 92 the principal findings are that the majority of welfare spells are experienced by single men and women without children and that while most welfare spells are short there is a high incidence of recidivism although continuous long term use and dependence on welfare is not characteristic of most recipients experiences the program does not provide an effective route to financial independence since most users periodically return to the program

exchange of indivisible goods and indifferences the top trading absorbing sets mechanisms there is a wide range of economic problems that involve the exchange of indivisible goods with no monetary transfers starting from the housing market model of the seminal paper by shapley and scarf 1974 to problems such as the kidney exchange or the school choice problem the classical solution to many of these models is to apply a mechanism called top trading cycles attributed to david gale which satisfies good properties for the case of strict preferences in this paper we propose a family of mechanisms called top trading absorbing sets mechanisms which generalize the top trading cycles to the general case in which individuals are allowed to report indifferences while preserving a maximal possible set of its desirable properties

eliciting preferences to assign positions and compensation abstract we describe strategy proof rules for economies where an agent is assigned a position e g a job plus some of a divisible good for the 2 agent 2 position case we derive a robust characterization for the multi agent position case many arbitrary such rules exist so we consider additional requirements by also requiring coalitional strategy proofness or nonbossiness the range of a solution is restricted to the point that such rules are not more complex than those for the shapley scarf housing model no divisible good third we show that essentially only constant solutions are immune to manipulations involving bribes finally we demonstrate a conflict between efficiency and strategy proofness the results extend to models without externalities in which agents share positions journal of economic literature classification numbers c72 d70

learning about the future and dynamic efficiency we analyze the conditions under which an efficient allocation of resources is achievable in a dynamic private values setting where the designer gradually learns about the distribution of agents values as an application consider the sequential allocation of scarce spectrum to emerg ing technologies whenever a new technology appears a benevolent designer is faced with a problem should he allocate a valuable chunk of spectrum right now while forfeiting for a long period of time the option of allocating it to a possibly superior future technology it makes sense to assume here that current firms have a better knowledge of their technological prow ess than the designer and that the designer s assessment of future technological possibilities is improved by observing the current technology if technology owners are strategic we show below that the learning process about the future disturbs the ability to extract the information necessary for efficient decision making another good example is hiring by an organization that fills positions at different hierarchy levels over time while all candidates prefer higher level positions some aspect of their ability to perform the needed tasks at each level is privately known to the candidates if contracts with current employees are difficult to adjust the designer must carefully compare the quality of present candidates which can serve as a signal about the market to the expected quality of candidates that may become available in the future finally consider a firm allocating franchises in a country where it did not operate before and where contractual clauses or other impediments prevent reallocation during a significant period of time local potential franchisees may have some superior information regarding future prof itability in the respective market and hence the elicitation of private information is crucial for a franchisor that is supposed to get a share of the future profits

the probabilistic serial mechanism with private endowments abstract a random assignment is ordinally efficient if it is not stochastically dominated with respect to individual preferences over sure objects when there are no private endowments the set of ordinally efficient random assignments is characterized by the eating algorithm bogomolnaia and moulin 2001 when there are private endowments the main requirement is individual rationality however the eating algorithm fails to deliver this property our contribution is the natural generalization of the eating algorithm for this general class of problems the family of this generalized eating algorithm characterizes the set of individually rational and ordinally efficient random assignments a special solution in this family the individually rational probabilistic serial ps ir also achieves a new fairness axiom no justified envy however it is not immune to strategic manipulation we show that individual rationality no justified envy and strategy proofness are incompatible

estimates of effective guarantees and tax rates in the afdc program for the post obra period we employ the model used by fraker moffitt and wolf 1985 to estimate effective tax rates and guarantees in the aid to families with dependent children afdc program for the years 1967 82 to produce comparable estimates for 1983 91 we compare this method of benefit prediction with other methods in the literature and clarify the interpretation of estimates generated using the fraker moffitt and wolf model we use our estimates for the period from 1983 to 1991 to examine how effective afdc tax rates and guarantee levels have changed over time and relative to nominal or official program parameters

welfare and the family the canadian experience canada has a universal social assistance program that is almost completely administered through the federal canada assistance program however provinces determine the levels of assistance for various groups eligible for welfare this article exploits the variation in payments and uses microdata to estimate the effect of changes in welfare benefits on welfare participation single parenthood births out of wedlock divorce and labor force participation among low income women in canada it would appear that welfare benefits influence these decisions

exchange in a general market with indivisible goods abstract we show how to restrict trades in exchange markets with heterogeneous indivisible goods so that the resulting restricted exchange markets the fixed deal exchange markets have a unique core allocation our results on fixed deal exchange markets generalize classical results on the shapley scarf housing market in which each agent owns one good only furthermore we define the class of fixed deal exchange rules for general exchange markets and prove that these are the only exchange rules that satisfy strategyproofness individual rationality and a weak form of efficiency

coalitional strategy proof house allocation abstract we consider house allocation without endowments we show that there is a unique maximal domain including all strict preferences on which efficiency and coalitional strategy proofness are compatible a preference relation belongs to the unique maximal domain if it is a strict descending ranking of houses to a certain house and indifference holds over it and the remaining houses we also show that on this domain mixed dictator pairwise exchange rules are the only rules satisfying efficiency and coalitional strategy proofness journal of economic literature classification numbers c78 d63 d71

why are fertility rates and female employment ratios positively correlated across o e c d countries we develop a quantitative theory of fertility and labor market participation de cisions in order to investigate the role of labor market frictions to understand the positive association between fertility and employment among o e c d countries we nd that unemployment induces females to postpone and space births which in turn reduces the total fertility rate moreover diferences in female labor outcomes across the u s and spain can account for the low fertility rate in spain relative to the u s we also nd that labor market frictions low probability of nding a job determine how employment and fertility are associated across economies in particular fertility and employment are positively associated across economies with low employment ratios low probability of nding a job on the other hand fertility and employment are negatively associated across economies with a high probability of nding a job

pareto optimality in coalition formation abstract a minimal requirement on allocative efficiency in the social sciences is pareto optimality in this paper we identify a close structural connection between pareto optimality and perfection that has various algorithmic consequences for coalition formation based on this insight we formulate the preference refinement algorithm pra which computes an individually rational and pareto optimal outcome in hedonic coalition formation games our approach also leads to various results for specific classes of hedonic games in particular we show that computing and verifying pareto optimal partitions in general hedonic games anonymous games three cyclic games room roommate games and b hedonic games is intractable while both problems are tractable for roommate games w hedonic games and house allocation with existing tenants

common and conflicting interests in two sided matching markets abstract this paper reviews and synthesizes some of what is now known about what i will call two sided matching markets a number of such models which arise naturally in the study of certain labor markets have been shown to have surprising implications about the common and conflicting interests of the agents and about the incentives they face

why is the rate of single parenthood lower in canada than in the u s a dynamic equilibrium analysis of welfare policies a critical question in the design of welfare policies is whether to target aid according to household composition as was done in the u s under the aid to families with dependent children afdc program or to rely exclusively on means testing as in canada restricting aid to single mothers for instance has the potential to distort behavior along three demographic margins marriage fertility and divorce we contrast the canadian and the u s policies within an equilibrium model of household formation and human capital investment on children policy differences we consider are eligibility dependence of transfers on the number of children and generosity of transfers our simulations indicate that the policy differences can account for the higher rate of single parenthood in the u s they also show that canadian welfare policy is more effective for fostering human capital accumulation among children from poor families interestingly a majority of agents in our benchmark economy prefers a welfare system that targets single mothers as the u s system does yet does not unlike the u s system make transfers dependent on the number of children

economic engineering and the design of matching markets the contributions of alvin e roth alvin roth s research on and design of new economic systems has had a wide and large impact on human welfare from the matching of residents to medical programs to the assignment of students to schools to the manner in which kidneys are allocated to patients needing transplants this article discusses his important contributions to the understanding and improvement of matching markets highlighting roth s key roles in some of the most prominent successes of market design and the ascension of economic engineering

efficient dynamic barter exchange we study dynamic matching policies in a stochastic marketplace for barter with agents arriving over time each agent is endowed with an item and is interested in an item possessed by another agent homogeneously with probability p independently for all pairs of agents three settings are considered with respect to the types of allowed exchanges a only two way cycles in which two agents swap items b two way or three way cycles c unbounded chains initiated by an agent who provides an item but expects nothing in return we consider the average waiting time as a measure of efficiency and find that the cost outweighs the benefit from waiting to thicken the market in particular in each of the above settings a policy that conducts exchanges in a greedy fashion is near optimal further for small p we find that allowing three way cycles greatly reduces the waiting time over just two way cycles and conducting exchanges through a chain further reduces the waiting time significantly thus a centra

top trading with fixed tie breaking in markets with indivisible goods abstract we study markets with indivisible goods where monetary compensations are not possible each individual is endowed with an object and a preference relation over all objects when preferences are strict gale s top trading cycles algorithm finds the unique core allocation when preferences are not necessarily strict we use an exogenous profile of tie breakers to resolve any ties in individuals preferences and apply gale s top trading cycles algorithm for the resulting profile of strict preferences we provide a foundation of these simple extensions of gale s top trading cycles algorithm from strict preferences to weak preferences we show that gale s top trading cycles algorithm with fixed tie breaking is characterized by individual rationality strategy proofness weak efficiency non bossiness and consistency our result supports the common practice in applications to break ties in weak preferences using some fixed exogenous criteria and then to use a good and simple rule for the resulting strict preferences

on the state of the union an overlapping generations model of marriage and divorce is constructed to analyze family structure and intergenerational mobility agents differ by sex marital status and human capital single agents meet in a marriage market and decide whether to accept or reject proposals to wed married couples must decide whether to separate or not parents invest in their children depending on their wherewithal a simulated version of the theoretical prototype can generate an equilibrium with a significant number of female headed families and a high degree of persistence in income across generations to illustrate the model s mechanics the effects of two antipoverty policies namely child support and welfare are investigated

reclaim proof allocation of indivisible objects abstract we study desirability axioms imposed on allocations in indivisible object allocation problems the existing axioms in the literature are various conditions of robustness to blocking coalitions with respect to agents ex ante individual rationality and group rationality and ex post pareto efficiency endowments we introduce a stringent axiom that encompasses and strengthens the existing ones an allocation is reclaim proof if it is robust to blocking coalitions with respect to any conceivable interim endowments of agents this is an appealing property in dynamic settings where the assignments prescribed by an allocation to be implemented need to be made in multiple rounds rather than all in one shot we show that an allocation is reclaim proof if and only if it is induced by a yrmh igyt mechanism introduced by abdulkadiroglu and sonmez 1999 and if and only if it is a competitive allocation

optimal dynamic mechanism design with deadlines a seller maximizes revenue from selling an object in a dynamic environment with buyers that differ in their patience each buyer has a privately known deadline for buying and a privately known valuation first we derive the optimal mechanism neglecting the incentive constraint for the deadline the deadline of the winner determines the time of the allocation and therefore also the amount of information available to the seller when he decides whether to allocate to a buyer depending on the shape of the markup that the seller uses this can lead to a violation of the neglected incentive constraint we give sufficient conditions on the type distribution under which the neglected constraint is fulfilled or violated second for the case that the constraint cannot be neglected we consider a model with two periods and two buyers here the optimal mechanism is implemented by a fixed price in period one and an asymmetric auction in period two the asymmetry which is introduced to prevent the patient type of the first buyer from buying in period one leads to pooling of deadlines at the top of the type space

distributional impacts of the self sufficiency project a large literature has been concerned with the impacts of recent welfare reforms on income earnings transfers and labor force attachment while one strand of this literature relies on observational studies conducted with large survey sample data sets a second makes use of data generated by experimental evaluations of changes to means tested programs much of the overall literature has focused on mean impacts in this paper we use random assignment experimental data from canada s self sufficiency project ssp to look at impacts of this unique reform on the distributions of income earnings and transfers ssp offered members of the treatment group a generous subsidy for working full time quantile treatment effect qte estimates show there was considerable heterogeneity in the impacts of ssp on the distributions of earnings transfers and total income this heterogeneity would be missed by looking only at average treatment effects moreover these heterogeneous impacts are consistent with the predictions of labor supply theory during the period when the subsidy is available the ssp impact on the earnings distribution is zero for the bottom half of the distribution the quantiles of the ssp earnings distribution are higher for much of the upper third of the distribution except at the very top where the quantiles of the earnings distribution are the same under either program or possibly lower under ssp further during the period when ssp receipt was possible the impacts on the quantiles of the distributions of transfer payments income assistance plus the subsidy and total income earnings plus transfers are also different at different points of the distribution in particular positive impacts on the quantiles of the transfer distribution are concentrated at the lower end of the transfer distribution while positive impacts on the quantiles of the income distribution are concentrated in the upper end of the income distribution impacts of ssp on these distributions were essentially zero after the subsidy was no longer available

incentive compatibility in a market with indivisible goods abstract in a market in which each trader s initial endowment is one unit of an indivisible good there exists an incentive compatible procedure for reaching a competitive allocation this contrasts with some recent results for similar problems

welfare benefits and the duration of welfare spells evidence from a natural experiment in canada abstract this paper uses a major reform of the welfare program implemented in the province of quebec canada in 1989 to analyze the impact of benefits on the length of welfare spells an important feature of this reform was the abolishment of discrimination based on age that applied to benefits as a result the monthly benefits of single individuals aged less than 30 increased from 173 to 425 1986 an increase of over 145 to assess the impact of the reform we estimate a series of semi parametric hazard models analogous to the regression approach to difference in differences estimation the estimated duration elasticities with respect to benefits for single men and women aged 22 29 are 0 25 and 0 28 respectively

strategy proofness and the core in house allocation problems abstract we study house allocation problems introduced by l shapley and h scarf 1974 j math econ 1 23 28 we prove that a mechanism a social choice function is individually rational anonymous strategy proof and nonbossy but not necessarily pareto efficient if and only if it is either the core mechanism or the no trade mechanism where the no trade mechanism is the one that selects the initial allocation for each profile of preferences this result confirms the intuition that even if we are willing to accept inefficiency there exists no interesting strategy proof mechanism other than the core mechanism journal of economic literature classification numbers c71 c78 d71 d78 d89