Essays in Market Design

In this dissertation, I study three problems in market design: the allocation of resources to schools using deferred acceptance algorithms, the demand reduction of employees on centralized labor markets, and the alleviation of traffic congestion. I show how institutional and behavioral considerations specific to each problem can alleviate several practical limitations faced by current solutions. For the case of traffic congestion, I show experimentally that the proposed solution is effective. In Chapter 1, I investigate how school districts could assign resources to schools when it is desirable to provide stable assignments. An assignment is stable if there is no student currently assigned to a school that would prefer to be assigned to a different school that would admit him if it had the resources. Current assignment algorithms assume resources are fixed. I show how simple modifications to these algorithms produce stable allocations of resources and students to schools. In Chapter 2, I show how the negotiation of salaries within centralized labor markets using deferred acceptance algorithms eliminates the incentives of the hiring firms to strategically reduce their demand. It is well-known that it is impossible to eliminate these incentives for the hiring firms in markets without negotiation of salaries. Chapter 3 investigates how to achieve an efficient distribution of traffic congestion on a road network. Traffic congestion is the product of an externality: drivers do not consider the cost they impose on other drivers by entering a road. In theory, Pigouvian prices would solve the problem. In practice, however, these prices face two important limitations: i) the information required to calculate these prices is unavailable to policy makers and ii) these prices would effectively be new taxes that would transfer resources from the public to the government. I show how to construct congestion prices that retrieve the required information from the drivers and do not transfer resources to the government. I circumvent the limitations of Pigouvian prices by assuming that individuals make some mistakes when selecting routes and have a tendency towards truth-telling. Both assumptions are very robust observations in experimental economics.

Essays on Matching Markets and Their Equilibria

Matching theory and matching markets are a core component of modern economic theory and market design. This dissertation presents three original contributions to this area. The first essay constructs a matching mechanism in an incomplete information matching market in which the positive assortative match is the unique efficient and unique stable match. The mechanism asks each agent in the matching market to reveal her privately known type. Through its novel payment rule, truthful revelation forms an ex post Nash equilibrium in this setting. This mechanism works in one-, two- and many-sided matching markets, thus offering the first mechanism to unify these matching markets under a single mechanism design framework. The second essay confronts a problem of matching in an environment in which no efficient and incentive compatible matching mechanism exists due to matching externalities. I develop a two-stage matching game in which a contracting stage facilitates subsequent conditionally efficient and incentive compatible Vickrey auction stage. Infinite repetition of this two-stage matching game enforces the contract in every period. This mechanism produces inequitably distributed social improvement: parties to the contract receive all of the gains and then some. The final essay demonstrates the existence of prices which stably and efficiently partition a single set of agents into firms and workers, and match those two sets to each other. This pricing system extends Kelso and Crawford's general equilibrium results in a labor market matching model and links one- and two-sided matching markets as well.

Of Mice and Men: An Ergonomic and Market Assessment of Current Computer Mice

Gemstone Team MICE (Modifying and Improving Computer Ergonomics)

A MORE COMPLETE STREET A STREET FOR EVERYONE TO ENJOY, NORTH EAST STREET, FREDERICK, MARYLAND – A DESIGN INVESTIGATION OF DIFFERENT STREET DESIGN THEORIES

This design-research thesis suggests that the improvement of North East Street performances by using Complete Streets, Green Street, Place Making and Context Sensitive Solution principles and practices. Heavily used by a variety of users, often conflicting with one another, University of Maryland Campus Drive would benefit from a major planning and design amelioration to meet the increasing demands of serving as a city main street. The goal of this thesis project is to prioritize the benefits for pedestrians in the right-of-way and improve the pedestrian experience. This goal also responds to the recent North East Street Extension Phrase I of economic renaissances. The goal of this design-research thesis will be achieved focusing on four aspects. First, the plans and designs will suggest to building mixed use blocks, increase the diversity of street economic types and convenience of people’s living. Second, design and plans will propose bike lanes, separate driving lanes from sidewalks and bike lanes by street tree planters, and narrow driving lanes to reduce vehicular traffic volume and speed in order to reduce pedestrian and vehicle conflicts. Third, plans and designs will introduce bioswales, living walls and raingardens to treat and reuse rain water. Finally, the plans and designs will seek to preserve local culture and history by adding murals and farmers market. The outcome of the design-research thesis project is expected to serve as an example of implementing Complete Streets, Green Street, Place Making and Context Sensitive Solution principles and practices in urban landscape, where transportation, environment and social needs interact with each other.