We consider a priority based allocation problem with general weak priorities. We focus on two strategy-proof mechanisms: the deferred acceptance (DA) mechanism and the top trading cycles (TTC) mechanism. We give two conditions on weak priority structures whereby each of the DA mechanism and TTC...

We build a model of firm-level innovation, productivity growth and reallocation featuring endogenous entry and exit. A new and central economic force is the selection between highand low-type firms, which differ in terms of their innovative capacity. We estimate the parameters of the model using...

Measures of institutional quality are strong predictors of cross-country differences in income and productivity. The institutional economics literature has long maintained that one way institutions influence economic growth is by impacting the efficient allocation of production factors across...

We show that the political connections of Chinese firms have a substantial influence on the allocation of government subsidies, which exacerbates the economy's capital misallocation. Our identification strategy exploits a regulation that forces politically connected independent directors –...

Central bank large-scale asset purchases, such as the purchase of securities of nonfinancial firms, can induce a misallocation of resources through their heterogeneous effect on firm cost of capital. First, we analytically demonstrate the mechanism in a two-period model. We then evaluate the...

This paper compares two prominent stochastic assignment mechanisms in the laboratory: Random serial dictatorship (RSD) and top trading cycles with random endowments (TTC). In standard theory, both mechanisms are strategy-proof and Pareto-efficient for the house allocation problem without...

In this paper, we define and investigate quantity-contingent auctions. Such auctions can be used when there exist multiple units of a single product and the value of a set of units depends on the total quantity sold. For example, a road network or airport will become congested as the number of...