Nuremberg Research Seminar in Economics on 29 May 2024, LG 0.423
You are invited to join the weekly Nuremberg Research Seminar in Economics on 29 May 2024, from 13.15 to 14.45 pm. The seminar will be held in room LG 0.423. Achim Wambach (ZEW Mannheim) will be talking about „Constraints on Matching Markets Based on Moral Concerns”.
More information can be found here:
Many markets enforce bans on monetary transfers driven by concerns that wealthier people may have better access to resources. This study discusses the appropriateness of banning transfers as a solution to address such inequality concerns. We examine an assignment problem involving agents with heterogeneous wealth endowments and preferences with positive income effects.
To address the inequality concerns, we introduce discrimination-freeness as a constraint. Discrimination-freeness requires that the allocation of objects is independent of individuals’ wealth endowments. We show that for significant wealth inequalities, money is needed for efficiency. However, a market designer who must not use monetary transfers faces the same restrictions for the allocation of resources as a designer who is bound by discrimination-freeness. For small wealth inequalities, the results are different. Depending on the structure of the preference space, efficiency can be reached without using transfers or the market designer can trade off cardinalities without violating discrimination-freeness. If money can be used outside a market designer’s control, additional restrictions beyond mere transfer-freeness might be necessary to address concerns of discrimination.