Top Trading Cycles in Prioritized Matching: An Irrelevance of Priorities in Large Markets

Top trading cycles (TTC) provides a method for assigning resources efficiently while taking agents’ priorities into account. Although TTC favors agents with high priorities in the assignment, we show in a canonical random preference/priority model that the effect of priorities in TTC disappears as the market grows large, leading in the limit to an assignment that entails virtually the same amount of justified envy as does Random Serial Dictatorship, which completely ignores priorities. JEL Classification Numbers: C70, D47, D61, D63.