>>2562210Introducing Fixed PricesWhat if instead of a bidding for resources with variable-price bids, the bids must be done at fixed prices? I very strongly feel that a resource-allocation system needs to have some flexibility. Imagine only one pseudo-firm wants some resource, but doesn't have the play-money. Isn't that a very silly situation? If the prices are fixed, it should be possible and indeed trivial for that pseudo-firm's spending to exceed its budget to get the resource.
What is the purpose of the budgets? To give the pseudo-firms power to access resources. If society decides to give pseudo-firm A twice the budget society gives to pseudo-firm B for the next period, our working assumption is that society evaluates what A will do as more important than what B will do (even though the two decisions might be made by two different committees without a single person being a member of both). If we have to state any sort of ratio of importance here, we assume that what pseudo-firm A will do is deemed as
twice as important by society compared to B. (I'm assuming here A and B are in the same tier. Like in the system with flexible prices, we can have lexicographic tiers of importance for the pseudo-firms, so that a lower tier only gets the leftovers from the higher tiers.)
Suppose the spending period isn't over yet so no new budgets are yet available, but both pseudo-firms are already out of play-money for accessing resources. They are
going into minus. I'm using this phrasing for a reason. I'm NOT saying they are "going into debt", because
they won't have to pay back anything. Any pseudo-firm's play-money account, whether positive or negative, gets reset to zero at regular intervals and it gets a new budget.
Suppose there is a resource that nobody is bidding for except A and B, each asking for all of it. (Despite using fixed prices here, I'm still using the term "bids", because like with variable-price bidding the requests are not instantly approved, instead we wait for a while till bids are closed; and if the demand exceeds what's in stock, we allocate the stuff in a way that follows a simple rule that has nothing to do with the order in which the bids arrived.) Suppose both A and B are in minus. Again, it is clear that the resource should be assigned despit
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