Publication Type
Journal Article
Version
acceptedVersion
Publication Date
10-2006
Abstract
This paper investigates the allocative efficiency of two non-price allocation mechanisms – the lottery (random allocation) and the waiting-line auction (queue system) – for the cases where consumers possess identical time costs (the homogeneous case), and where time costs are correlated with time valuations (the heterogeneous case). We show that the relative efficiency of the two mechanisms depends critically on a scarcity factor (measured by the ratio of the number of objects available for allocation over the number of participants) and on the shape of the distribution of valuations. We show that the lottery dominates the waiting-line auction for a wide range of situations, and that while consumer heterogeneity may improve the relative allocative efficiency of the waiting-line auction, the ranking on relative efficiency is not reversed.
Keywords
Lottery, Non-price allocation, Rent-seeking, Waiting-line auction
Discipline
Behavioral Economics | Econometrics
Research Areas
Applied Microeconomics; Econometrics
Publication
Social Choice and Welfare
Volume
27
Issue
2
First Page
289
Last Page
310
ISSN
0176-1714
Identifier
10.1007/s00355-006-0134-y
Publisher
Springer
Citation
KOH, Winston T. H.; YANG, Zhenlin; and ZHU, Lijing.
Lottery Rather than Waiting-Line Auction. (2006). Social Choice and Welfare. 27, (2), 289-310.
Available at: https://ink.library.smu.edu.sg/soe_research/204
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1007/s00355-006-0134-y