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On the tradeoff between efficiency and strategyproofness

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  • Aziz, Haris
  • Brandl, Florian
  • Brandt, Felix
  • Brill, Markus

Abstract

We study social decision schemes (SDSs), i.e., functions that map a collection of individual preferences over alternatives to a lottery over the alternatives. Depending on how preferences over alternatives are extended to preferences over lotteries, there are varying degrees of efficiency and strategyproofness. In this paper, we consider four such preference extensions: stochastic dominance (SD), a strengthening of SD based on pairwise comparisons (PC), a weakening of SD called bilinear dominance (BD), and an even weaker extension based on Savage's sure-thing principle (ST). While random serial dictatorships are PC-strategyproof, they only satisfy ex post efficiency. On the other hand, we show that strict maximal lotteries are PC-efficient and ST-strategyproof. We also prove the incompatibility of (i)PC-efficiency and PC-strategyproofness for anonymous and neutral SDSs, (ii) ex post efficiency and BD-strategyproofness for pairwise SDSs, and (iii) ex post efficiency and BD-group-strategyproofness for anonymous and neutral SDSs.

Suggested Citation

  • Aziz, Haris & Brandl, Florian & Brandt, Felix & Brill, Markus, 2018. "On the tradeoff between efficiency and strategyproofness," Games and Economic Behavior, Elsevier, vol. 110(C), pages 1-18.
    • Handle: RePEc:eee:gamebe:v:110:y:2018:i:c:p:1-18
    DOI: 10.1016/j.geb.2018.03.005
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    Cited by:

    1. Felix Brandt & Patrick Lederer & René Romen, 2024. "Relaxed notions of Condorcet-consistency and efficiency for strategyproof social decision schemes," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 63(1), pages 19-55, August.
    2. Brandt, Felix & Saile, Christian & Stricker, Christian, 2022. "Strategyproof social choice when preferences and outcomes may contain ties," Journal of Economic Theory, Elsevier, vol. 202(C).
    3. Brandl, Florian & Brandt, Felix & Hofbauer, Johannes, 2019. "Welfare maximization entices participation," Games and Economic Behavior, Elsevier, vol. 114(C), pages 308-314.
    4. Florian Brandl & Felix Brandt, 2020. "Arrovian Aggregation of Convex Preferences," Econometrica, Econometric Society, vol. 88(2), pages 799-844, March.
    5. Florian Brandl & Felix Brandt & Christian Stricker, 2022. "An analytical and experimental comparison of maximal lottery schemes," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 58(1), pages 5-38, January.
    6. Brandt, Felix & Lederer, Patrick & Suksompong, Warut, 2023. "Incentives in social decision schemes with pairwise comparison preferences," Games and Economic Behavior, Elsevier, vol. 142(C), pages 266-291.

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    More about this item

    Keywords

    Strategyproofness; Efficiency; Stochastic dominance; Random serial dictatorship; Maximal lotteries;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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