2025-26 Rising Stars in Market Design

Title: Competitive Combinatorial Exchange

 

Abstract: We consider combinatorial exchanges where agents have (possibly random) endowments and ordinal preferences over bundles of indivisible goods. For any market instance, we show that there exists an approximately feasible, individually rational, and ordinally efficient lottery assignment. This assignment can be supported by prices derived from a novel competitive equilibrium concept, which we term a Budget-Relaxed Approximate Competitive Equilibrium (BRACE). Any BRACE can be implemented as a lottery over deterministic allocations that are approximately feasible, individually rational and efficient. When endowments are deterministic, it can be implemented over near-feasible weak core outcomes. Moreover, BRACEs are ordinally envy-free and ex-post envy-free up to one good (where envy is only justified if another agent’s endowment is either smaller or worth less in equilibrium). A mechanism that implements a BRACE is strategyproof in the large. Our framework can be used in many real-world market design applications, such as organ exchanges, tuition exchanges, time bank sharing, shift exchanges, and resource reallocation.

Title: Targeting and Price Pass-Through in Voucher Design: Evidence from Chile

 

Abstract: Vouchers are a common policy for expanding access to homeownership, yet their effectiveness remains contested due to concerns about targeting and price pass-through of subsidies.  I study the equilibrium and distributional effects of targeted and rationed homeownership vouchers, using Santiago’s DS1 program as a case study—the largest homeownership voucher program in the OECD, subsidizing 7% of the city’s transactions. I build an equilibrium model of a housing market with vouchers whose demand incidence is determined by the endogenous composition of beneficiaries, and whose supply incidence operates along both intensive (transactions) and extensive (new development) margins.  I estimate the model using novel data on voucher applications and use, real estate transactions, and new development surveys. I evaluate the equilibrium impacts of the program relative to a scenario without the program, finding that it increases homeownership rates and new development while raising prices, with total benefits offsetting the costs.  Price increases exhibit significant heterogeneity across housing segments: they concentrate in beneficiaries’ preferred segments, harming unsubsidized low-income households. Counterfactual policies reveal a trade-off between targeting and price pass-through: policies that reduce price pass-through worsen targeting, as assistance goes to households more likely to become homeowners without the program. 

Title: Robust Technology Regulation

 

Abstract: We analyze how uncertain technologies should be robustly regulated and how regulation should evolve with new information. An adaptive sandbox comprising a zero marginal tax up to an evolving quantity limit is (i) robust: it delivers optimal payoff guarantees when the agent’s learning process and/or preferences are chosen adversarially; (ii) dominant: it outperforms other robust and regular mechanisms across all agent learning processes and preferences; (iii) time-consistent: it is the only robust mechanism that can be implemented without commitment. Robustness is important: absent robust regulation, worst-case payoffs can be arbitrarily poor and are induced by weak but growing optimism that encourages excessive risk-taking. Our results offer optimality foundations for existing policy and speak directly to current debates around managing emerging technologies.