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Room Assignment PowerPoint PPT Presentation

Room Assignment A Market Approach Hassaan Khan and Sam Yellen Dec. 4, 2007 Room Assignment - The Status Quo Housing is a very stressful experience for undergraduates Residential Colleges divided into Suites which are comprised of rooms Reasons for Stress Scarcity of Desirable suites

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Room Assignment

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Room assignment l.jpg

Room Assignment

A Market Approach

Hassaan Khan and Sam Yellen

Dec. 4, 2007


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Room Assignment - The Status Quo

  • Housing is a very stressful experience for undergraduates

  • Residential Colleges divided into Suites which are comprised of rooms


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Reasons for Stress

  • Scarcity of Desirable suites

  • Individual Preferences

    • Partners

    • Rooms

  • Heterogeneous distribution

  • Stickiness


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Existing System

  • Form teams to enter “room draw”

  • Teams advised by rooming committee about availability

  • Each team draws a number

  • Teams choose suites, largest to smallest according to lottery number

  • Unsuccessful team broken up and redraw for a smaller room.


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A Market Solution?


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Why a Market Solution?

  • Information asymmetry

    • Among groups

    • Within groups

    • Regulatory – (between housing committee and student body)

  • Temporal Rigidity

    • If groups are awarded in a set order, certain behaviors are incentivized.


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Markets Aggregate Preferences

  • Information asymmetry

    • Price can signal preference

      • For a individual choosing a group

      • For groups choosing rooms

  • Temporal Rigidity

    • Bids can be entered and modified simultaneously

    • Students can immediately bid on the rooms they find most desirable.


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Market Design

  • Each Student assigned 100 points.

  • Scarcity of points forces bids to reflect preferences

  • Two ways to bid

    • On individual room in a suite

    • Join a team and bid for a suite collectively

  • Bidders can diversify the spending of their points, so that if they do not win a certain room they still have a chance to win a different room.

  • Soft Ending – Auction closes a set amount of time after last bid.


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Experimental Design

  • 2 runs, 2 treatments each

  • Each player assigned affinities for other players

  • Status Quo vs. Market-Based

  • Participants asked to team up with other players to maximize utility, the sum of affinities


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Results

  • Market and Status Quo outcomes Identical


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Conclusions

  • Market Based Approach at least as efficient as status quo in allocating rooms.

    Other Observation:

  • Increased Utility of Larger rooms

    • Larger groups can have more friends

    • No additional preference for singles or smaller rooms


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Problems

  • Biased Group – groups sought to replicate success in previous round

  • Order of treatments not reversed

  • Suites were homogenous other than size

  • Group too small

    • Stickiness proportional to the number of possible groups

    • In class, approximately 15 students taken 3 at a time = 455 possible combinations

    • 200 students in groups of 5 – 2535650040 possible groups

    • 7 orders of magnitude difference!


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What do to next

  • Redo Experiment

    • Same set of utilities but assigned to different students in each treatment

    • Increase Complexity

      • Use a larger group of students

      • Increase heterogeneity of rooms using floor maps

      • Use homegrown affinities by letting groups of friends test the system.

        • Utility will be measured by using a questionnaire

    • Convince Pierson College to Accept Our System


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