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A note on the incompatibility of strategy-proofness and Pareto-optimality in quasi-linear settings with public budgets

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  • Lavi, Ron
  • May, Marina
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    Abstract

    We show that any deterministic mechanism, for allocating identical items that are complements to budget-constrained bidders, cannot simultaneously satisfy individual-rationality, strategy-proofness, Pareto-efficiency, and no-positive-transfers. This holds even for two bidders, two items, and commonly-known budgets, and generalizes to richer settings.

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    Bibliographic Info

    Article provided by Elsevier in its journal Economics Letters.

    Volume (Year): 115 (2012)
    Issue (Month): 1 ()
    Pages: 100-103

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    Handle: RePEc:eee:ecolet:v:115:y:2012:i:1:p:100-103

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    Web page: http://www.elsevier.com/locate/ecolet

    Related research

    Keywords: Budget constraints; Strategy-proofness; Pareto-optimality;

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    References

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    1. Ashlagi Itai & Braverman Mark & Hassidim Avinatan & Lavi Ron & Tennenholtz Moshe, 2010. "Position Auctions with Budgets: Existence and Uniqueness," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-32, May.
    2. Satterthwaite, Mark Allen, 1975. "Strategy-proofness and Arrow's conditions: Existence and correspondence theorems for voting procedures and social welfare functions," Journal of Economic Theory, Elsevier, vol. 10(2), pages 187-217, April.
    3. Groves, Theodore, 1973. "Incentives in Teams," Econometrica, Econometric Society, vol. 41(4), pages 617-31, July.
    4. Gibbard, Allan, 1973. "Manipulation of Voting Schemes: A General Result," Econometrica, Econometric Society, vol. 41(4), pages 587-601, July.
    5. Maskin, Eric S., 2000. "Auctions, development, and privatization: Efficient auctions with liquidity-constrained buyers," European Economic Review, Elsevier, vol. 44(4-6), pages 667-681, May.
    6. Dobzinski, Shahar & Lavi, Ron & Nisan, Noam, 2012. "Multi-unit auctions with budget limits," Games and Economic Behavior, Elsevier, vol. 74(2), pages 486-503.
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    Cited by:
    1. Rica Gonen & Anat Lerner, 2013. "The Incompatibility of Pareto Optimality and Dominant-Strategy Incentive Compatibility in Sufficiently-Anonymous Budget-Constrained Quasilinear Settings," Games, MDPI, Open Access Journal, vol. 4(4), pages 690-710, November.

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