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Strategy-proofness and Pareto-efficiency in quasi-linear exchange economies

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  • , Prabal

    (Indian Statistical Institute, New Delhi)

  • ,

    (Indian Statistical Institute, Kolkata)

  • ,

    (Indian Statistical Institute, New Delhi)

Abstract

In this paper, we revisit a long-standing question on the structure of strategy-proof and Pareto-efficient social choice functions (SCFs) in classical exchange economies (Hurwicz (1972)). Using techniques developed by Myerson in the context of auction-design, we show that in a specific quasi-linear domain, every Pareto-efficient and strategy-proof SCF satisfying non-bossiness and a mild continuity property is dictatorial. The result holds for an arbitrary number of agents but the two-person version does not require either the non-bossiness or continuity assumptions. It also follows that the dictatorship conclusion holds on any superset of this domain. We also provide a minimum consumption guarantee result in the spirit of Serizawa and Weymark (2003).

Suggested Citation

  • , Prabal & , & ,, 2014. "Strategy-proofness and Pareto-efficiency in quasi-linear exchange economies," Theoretical Economics, Econometric Society, vol. 9(2), May.
    • Handle: RePEc:the:publsh:1214
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    Cited by:

    1. Erlanson, Albin & Szwagrzak, Karol, 2013. "Strategy-Proof Package Assignment," Working Papers 2013:43, Lund University, Department of Economics.
    2. Takeshi Momi, 2020. "Efficient and strategy-proof allocation mechanisms in many-agent economies," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 55(2), pages 325-367, August.
    3. Özgür Kıbrıs & İpek Tapkı, 2014. "A mechanism design approach to allocating central government funds among regional development agencies," Review of Economic Design, Springer;Society for Economic Design, vol. 18(3), pages 163-189, September.
    4. Ehlers, Lars & Majumdar, Dipjyoti & Mishra, Debasis & Sen, Arunava, 2020. "Continuity and incentive compatibility in cardinal mechanisms," Journal of Mathematical Economics, Elsevier, vol. 88(C), pages 31-41.
    5. Ryan Tierney, 2016. "On the manipulability of efficient exchange rules," ISER Discussion Paper 0987, Institute of Social and Economic Research, Osaka University.
    6. Lars EHLERS & Dipjyoti MAJUMDAR & Debasis MISHRA & Arunava SEN, 2016. "Continuity and Incentive Compatibility in Cardinal Voting Mechanisms," Cahiers de recherche 04-2016, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    7. Carbajal, Juan Carlos & Müller, Rudolf, 2017. "Monotonicity and revenue equivalence domains by monotonic transformations in differences," Journal of Mathematical Economics, Elsevier, vol. 70(C), pages 29-35.
    8. Mostapha Diss & Ahmed Doghmi & Abdelmonaim Tlidi, 2015. "Strategy proofness and unanimity in private good economies with single-peaked preferences," Working Papers 1528, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    9. Youngsub Chun & Manipushpak Mitra & Suresh Mutuswami, 2017. "Reordering an existing queue," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 49(1), pages 65-87, June.
    10. Mridu Goswami, 2015. "Non fixed-price trading rules in single-crossing classical exchange economies," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(2), pages 389-422, February.
    11. Mridu Prabal Goswami, 2022. "Non-dictatorial public distribution rules," Review of Economic Design, Springer;Society for Economic Design, vol. 26(2), pages 165-183, June.
    12. Mridu Prabal Goswami, 2013. "Non Fixed-Price Trading Rules In Single-Crossing Classical Exchange Economies," Working Papers 1311, Ben-Gurion University of the Negev, Department of Economics.
    13. Momi, Takeshi, 2017. "Efficient and strategy-proof allocation mechanisms in economies with many goods," Theoretical Economics, Econometric Society, vol. 12(3), September.
    14. Sjur Didrik Flåm, 2020. "Rights and rents in local commons," The Journal of Mechanism and Institution Design, Society for the Promotion of Mechanism and Institution Design, University of York, vol. 5(1), pages 119-140, December.
    15. Carbajal, Juan Carlos & Müller, Rudolf, 2015. "Implementability under monotonic transformations in differences," Journal of Economic Theory, Elsevier, vol. 160(C), pages 114-131.
    16. Erlanson, Albin & Flores-Szwagrzak, Karol, 2015. "Strategy-proof assignment of multiple resources," Journal of Economic Theory, Elsevier, vol. 159(PA), pages 137-162.
    17. Tierney, Ryan, 2019. "On the manipulability of efficient exchange rules," Theoretical Economics, Econometric Society, vol. 14(1), January.
    18. Mridu Prabal Goswami, 2014. "Equal Treatment of Equals in Classical Quasilinear Exchange Economies," Working Papers 1403, Ben-Gurion University of the Negev, Department of Economics.

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    More about this item

    Keywords

    Exchange economies; strategy-proofness; Pareto-efficiency; dictatorship;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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