Lotteries, Queues, and Bottlenecks (with Tom Rowe)
In D. Sobel and S. Wall (eds.), Oxford Studies in Political Philosophy Vol. 10. Oxford: Oxford University Press.
How should we make distributive decisions when there is not enough of the good to go around, or at least not enough of it right now? What does fairness require in such cases? In what follows, we distinguish between cases of scarcity and bottleneck cases, and we argue that both arguments for lotteries and arguments for queues have merit, albeit for different distributive scenarios. When dealing with scarcity not everyone can get the good. A secondary good that can be distributed fairly is the chances of obtaining the good. In cases of scarcity, lotteries are the best way of allocating chances of obtaining the good fairly. When dealing with bottlenecks, the secondary good that can and ought to be distributed fairly is waiting time. Queues are best suited to distribute the good of waiting time fairly.
Procedural Fairness in Exchange Matching Systems
Journal of Business Ethics, forthcoming.
The move from open outcry to electronic trading added another responsibility to futures exchanges—that of matching orders between buyers and sellers. Matching systems can affect the level and speed of price discovery, the distribution of revenue, as well as the level of price efficiency of a given market. Whether the matching system is procedurally fair is another important consideration. I argue that while FIFO (First In First Out) is a fair procedure in principle and is perceived as the default matching system, it is not a fair procedure in practice. Likewise, while pro rata is a fair procedure in principle, it is not so in practice. Nevertheless, both FIFO and pro rata are relics of an open outcry system. Instead, I propose an alternative approach to matching systems that builds on the strengths of electronic trading—the ability to randomize in real-time. I introduce random selection for service (RSS) as a matching system that is procedurally fair both in principle and in practice.