Mechanism Design and Its Application in Management Science

I utilize a mechanism design framework to show that the current most popular practice in the timeshare exchange industry can be greatly improved without a tremendous change in their fundamental systems. By focusing on the ten-billion dollar timeshare industry and proposing a superior mechanism to improve its operation, the research has significant substantive implications. At the same time, from the theoretical perspective, the research extends the literature on one-sided matching to cases where supply of resources is dynamic and resources can be stored.§§I also study the theoretical relationship between two important matching mechanisms: Top Trading Cycles (TTC) mechanism and Top Trading Cycles and Chains (TTCC) mechanism. I show that given a specific chain selection rule of TTCC, it can be reduced to TTC. However, this applies to only one special case and do not generalize to cases where other types of chain selection rules are used.§§Given the obvious link between the mechanism design work and the business systems that we observe in the marketplace, one of the potential contributions of my research is to encourage mechanism design study in management science.