New axioms for top trading cycles |
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| Authors: | Siwei Chen Yajing Chen Chia-Ling Hsu |
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| Institution: | 1. Lingnan College, Sun Yat-sen University, Guangzhou, China;2. School of Business, East China University of Science and Technology, Shanghai, China;3. Institute of Economics, National Sun Yat-sen University, Kaohsiung, Taiwan |
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| Abstract: | The school choice problem is of great importance both in theory and practice. This paper studies the (student-optimal) top trading cycles mechanism (TTCM) in an axiomatic way. We introduce two new axioms: MBG (mutual best group)-quota-rationality and MBG-robust efficiency. While stability implies MBG-quota rationality, MBG-robust efficiency is weaker than robust efficiency, which is stronger than the combination of efficiency and group strategy proofness. The TTCM is characterized by MBG-quota rationality and MBG-robust efficiency. Our results construct a new basis to compare the TTCM with the other school choice mechanisms, in terms of both fairness and incentive-related axioms. |
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| Keywords: | characterization mutual best group quota-rationality mutual best group robust efficiency top trading cycles mechanism |
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