What Money Can't Buy: Allocations with Priority Lists, Lotteries and Queues

Abstract

I study the welfare optimal allocation of a number of identical and indivisible objects to a set of heterogeneous risk-neutral agents under the hypothesis that money is not available. Agents have independent private values, which represent the maximum time that they are will- ing to wait in line to obtain a good. A priority list, which ranks agents according to their expected values, is optimal when hazard rates of the distributions of values are increasing. Queues, which allocates the ob- ject to those who wait in line the longest, are optimal in a symmetric setting with decreasing hazard rates.