We propose a criterion of approximate incentive compatibility, strategy-proofness in the large (SP-L), and argue that it is a useful second-best to exact strategy-proofness (SP) for market design. Conceptually, SP-L requires that an agent who regards a mechanism's “prices” as exogenous to...

We show that kidney exchange markets suffer from market failures whose remedy could increase transplants by 30%–63%. First, we document that the market is fragmented and inefficient: most transplants are arranged by hospitals instead of national platforms. Second, we propose a model to show...

In an economy with indivisible goods, a continuum of agents and quasilinear utility, we show that equilibrium exists regardless of the nature of agents' preferences over bundles. This contrasts with results for economies with a finite number of agents, which require restrictions on preferences...

Standard auction formats feature either an upper bound on the equilibrium price that descends over time (as in the Dutch auction) or a lower bound on the equilibrium price that ascends over time (as in the English auction). We show that, in some settings with costly information acquisition,...

This paper considers a simple equilibrium model of an imperfectly competitive two-sided matching market. Firms and workers may have heterogeneous preferences over matches on the other side, and the model allows for both uniform and personalized wages or contracts. To make the model tractable, I...

In an economy with indivisible goods, a continuum of agents and quasilinear utility, we show that equilibrium exists regardless of the nature of agents' preferences over bundles. This contrasts with results for economies with a finite number of agents, which require restrictions on preferences...

This paper considers the problem of a risk-neutral firm offering a gamble to consumers with preferences given by prospect theory. Under conditions satisfied by virtually all functional forms used in the literature, firms can extract arbitrarily high expected values from consumers. Moreover, for...