Manipulating the Probabilistic Serial Rule

Abstract: The probabilistic serial (PS) rule is one of the most prominent randomized rules for the assignment problem. It is well-known for its superior fairness and welfare properties. However, PS is not immune to manipulative behaviour by the agents. We initiate the study of the computational complexity of an agent manipulating the PS rule. We show that computing an expected utility better response is NP- hard. On the other hand, we present a polynomial-time algorithm to compute a lexicographic best response. For the case of two agents, we show that even an expected utility best response can be computed in polynomial time. Our result for the case of two agents relies on an interesting connection with sequential allocation of discrete objects.