Dynamic Assignment of Objects to Queuing Agents with Private Values

This paper analyzes the optimal assignment of objects which arrive sequentially to agents organized in a waiting list. Applications include the assignment of social housing and organs for transplants. We analyze the optimal design of probabilistic queuing disciplines, punishment schemes, the optimal timing of applications and information releases. We consider three efficiency criteria: the vector of values of agents in the queue, the probability of misallocation and the expected waste. Under private values, we show that the first-come first-served mechanism dominates a lottery according to the first two criteria but that lottery dominates first-come first-serve according to the last criterion. Punishment schemes accelerate turnover in the queue at the expense of agents currently in the waiting list, application schemes with commitment dominate sequential offers and information release always increases the value of agents at the top of the waiting list. JEL Classification Numbers: C78, D83, R31