The Scholarship Assignment Problem

There are n graduate students and n faculty members. Each student will be assigned a scholarship by the joint faculty. The socially optimal outcome is tbat the best studcnt should get the most prestigious scholarship, the second-best student should get the second most prcstigious scholarship, and so on. The socially optimal outcome is common knowledge among all faculty members. Each professor wants onc particular student to get the most prestigious scholarship and wants the remaining scholarships to be assigncd according to the socially optimal outcomc. Wc considcr thc problem of finding a mechanism such that in cquilibrium, all scholarships are assigned according to thc socially optimal outcome. Joumal of Economic Literature Classification Numbers: 070, 078. l'J 2002 Elscvier Sciencc