Assignment problem

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Assignment problem

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The Assignment Problem

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assignment problem in economics

  • Horst Siebert 3  

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The assignment problem can be understood as the issue how decision rights are allocated to the agents and organizational subunits of a society. In this wide interpretation, the assignment problem refers to three different, albeit related phenomena: i) the allocation of property rights to individuals, i.e. households, and to firms, ii) the allocation of decisions rights to the government (including its subunits) relative to the private sector, and, within the sphere of government, iii) the attribution of policy instruments to economic policy agents. Economic policy agents are the different layers of government, the central bank, and trade unions to name the most important ones. 1 Assigning decisions rights is not only a national problem but refers to international decision rules as well.

We can think of the assignment problem as an optimizing problem in which decision rights are allocated in such a way that a goal function is maximized. In this fundamental issue of institutional economics, the goal function is complex, including values such as individual freedom and equity as well as the economic criterion of efficiency. Phrasing the assignment problem in these terms, I am putting the problem as if we were to reinvent mankind’s institutional arrangements from scratch. This is, of course, only an abstract and a rather theoretical approach. In the real world, the allocation of property rights to agents is given, and the given allocation changes only marginally except for major upheavals as in the shift from communist central planning to the market economy. In the following we look for some principles for the allocation of decision rights.

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Introduction

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Siebert, H. (2001). The Assignment Problem. In: Berninghaus, S.K., Braulke, M. (eds) Beiträge zur Mikro- und zur Makroökonomik. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-56606-6_35

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Assignment Problems and the Location of Economic Activities

Two problems in the allocation of indivisible resources are discussed, which can be interpreted as problems of assigning plants to locations. The first problem, in which cost of transportation between plants is ignored, is found to be a linear programming problem, with which is associated a system of rents that sustains an optimal assignment. The recognition of cost of inter-plant transportation in the second problem introduces complications which call for more laborious and largely unexplored computations and which also appear to defeat the price system as a means of sustaining an optimal assignment.

  • DOI: 10.2307/1907742
  • Corpus ID: 154940014

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  1. Assignment problem

    The assignment problem is a fundamental combinatorial optimization problem. In its most general form, the problem is as follows: The problem instance has a number of agents and a number of tasks. Any agent can be assigned to perform any task, incurring some cost that may vary depending on the agent-task assignment.

  2. The Assignment Problem

    The assignment problem can be understood as the issue how decision rights are allocated to the agents and organizational subunits of a society. In this wide interpretation, the assignment problem refers to three different, albeit related phenomena: i) the allocation of property rights to individuals, i.e. households, and to firms, ii) the ...

  3. Assignment problem

    The assignment problem concerns the allocation of policy instruments to policy targets in order to improve policy effectiveness. Policy instruments are the variables or procedures that policy authorities directly control. Policymakers' use of these instruments to achieve objectives (i.e., policy targets) directly affects the welfare of their ...

  4. PDF Assignment Problems and the Location of Economic Activities

    In the assignment problem, we have that for an optimum allocation a 11 + a 22 >a 12 + a 21 i.e., a 11 a 12 >a 21 a 22: Neither absolute nor comparative advantage is the controlling principle. Basic principle is always opportunity cost in economics. Heckman Koopmans & Beckmann

  5. Assignments

    Problem Set 5 (PDF) Problem Set 6 Solutions (PDF) Problem Set 8 (PDF) Problem Set 9 Solutions (PDF) Problem Set 10 (PDF) Problem Set 10 Solutions (PDF) Freely sharing knowledge with learners and educators around the world. Learn more. This section contains the problem sets and solutions for the course.

  6. Assignment Problems and the Location of Economic Activities

    2. THE LINEAR ASSIGNMENT PROBLEM. A relatively simple problem in the allocation of indivisible resources is that of matching two sets of an equal number n of objects, by making up pairs of ob- jects consisting of one object from each set. Objects belonging to the same set are similar in kind but not identical.

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    Economic Thinking Problem Set. The LibreTexts libraries are Powered by NICE CXone Expert and are supported by the Department of Education Open Textbook Pilot Project, the UC Davis Office of the Provost, the UC Davis Library, the California State University Affordable Learning Solutions Program, and Merlot. We also acknowledge previous National ...

  8. Assignment Problems

    In the locational assignment problem p i is the firm's net profit or rent and q j the location rent. An optimal assignment is thus sustained by competitive markets in which p i and q j are charged as competitive prices, for any non-optimal assignment would not earn these wages and rents and thus incur a loss. When the number of objects to be matched is equal, the efficiency prices p i,q j ...

  9. PDF The Assignment Problem

    1 There is a somewhat dispersed literature on the assignment problem in different areas of economics, in the institutional set-up of an economy (for instance the German Freiburg School), in constitutional economics, in macroeconomic policy (Sachverständigenrat, 1967) and in international economics (Kenen, 2000, Chap­

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  11. Assignment Problems and the Location of Economic Activities

    Two problems in the allocation of indivisible resources are discussed, which can be interpreted as problems of assigning plants to locations. The first problem, in which cost of transportation between plants is ignored, is found to be a linear programming problem, with which is associated a system of rents that sustains an optimal assignment.

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    solutions. Freely sharing knowledge with learners and educators around the world. Learn more. MIT OpenCourseWare is a web based publication of virtually all MIT course content. OCW is open and available to the world and is a permanent MIT activity.

  13. Assignment Problems and the Location of Economic Activities

    2018. TLDR. This paper empirically analyze, in terms of difficulty, the instances (rankings) created u.a.r. of three popular problems: Linear Ordering Problem, Quadratic Assignment Problem and Flowshop Scheduling Problem, and adopts the framework of local search algorithms with the best improvement criterion. Expand. 2.

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