Incentives in landing slot problems

We analyze three applied incentive compatibility conditions within a class of queueing problems motivated by the reassignment of flights to airport landing slots. A preexisting landing schedule becomes wasteful when airlines privately learn updates about their flights’ cancelations or feasible flight times. The FAA’s objective is to create a new queue that does not waste landing slots. We separately consider the airlines’ incentives to report their flights’ (IC1) feasible arrival times, (IC2) delay costs, or (IC3) cancelations. Our first three results show that any Pareto efficient rescheduling rule must be manipulable by each of these three methods separately. By weakening efficiency to a form currently achieved by the FAA, we recover incentive compatibility with respect to (IC2) and (IC3) by extending the Deferred Acceptance (DA) algorithm, while the FAA’s current mechanism fails (IC3). Our extension is consistent with the FAA’s information infrastructure, which does not elicit delay cost information. We show that essentially any such rule must fail (IC1), but that our extension satisfies a weak version of (IC1). Our model can be viewed as a one-sided version of the Gale–Shapley College Admissions model where only college preferences are relevant. This makes it a counterpart to the School Choice model (Abdulkadiroğlu and Sönmez (2003)) in which only student preferences are relevant. ∗We are grateful for comments from Josh Cherry, Tayfun Sönmez, and seminar participants at Boston College and Northwestern University. We particularly thank Fuhito Kojima and Utku Ünver for extensive comments improving Section 5.3. J. Schummer thanks the ISER, Osaka University, for its hospitality during the beginning of this project. †MEDS, Kellogg School of Mgmt., Northwestern Univ. Email: [email protected]. ‡School of Business, Azerbaijan Diplomatic Academy, ADA. Email: [email protected].