Room assignment-rent division: A market approach

A group of friends consider renting a house but they shall first agree on how to allocate its rooms and share the rent. We propose an auction mechanism for room assignment-rent division problems which mimics the market mechanism. Our auction mechanism is efficient, envy-free, individually-rational and it yields a non-negative price to each room whenever that is possible with envy-freeness.We would like to thank seminar participants at Barcelona, Boston College, Duke, Koç, Málaga, MIT, Michigan, NYU, conference participants at the First Brazilian Workshop of Game Theory Society (Sao Paulo 2002), SED 2002-Conference on Economic Design (New York City 2002), The Sixth International Meeting of the Society for Social Choice and Welfare (Pasadena 2002), an anonymous referee for their comments and Ahmet Alkan, Selçuk Karabati, Bari Tan, nsan Tunali for insightful discussions. Sönmez gratefully acknowledges the research support of KoçBank via the KoçBank scholar program and Turkish Academy of Sciences in the framework of the Young Scientist Award Program via grant TS/TÜBA-GEBP/2002-1-19. Any errors are our own responsibility.     

The Elite Illusion: Achievement Effects at Boston and New York Exam Schools

Parents gauge school quality in part by the level of student achievement and a school's racial and socioeconomic mix. The importance of school characteristics in the housing market can be seen in the jump in house prices at school district boundaries where peer characteristics change. The question of whether schools with more attractive peers are really better in a value‐added sense remains open, however. This paper uses a fuzzy regression‐discontinuity design to evaluate the causal effects of peer characteristics. Our design exploits admissions cutoffs at Boston and New York City's heavily over‐subscribed exam schools. Successful applicants near admissions cutoffs for the least selective of these schools move from schools with scores near the bottom of the state SAT score distribution to schools with scores near the median. Successful applicants near admissions cutoffs for the most selective of these schools move from above‐average schools to schools with students whose scores fall in the extreme upper tail. Exam school students can also expect to study with fewer nonwhite classmates than unsuccessful applicants. Our estimates suggest that the marked changes in peer characteristics at exam school admissions cutoffs have little causal effect on test scores or college quality.