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Welfare maximization entices participation

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  • Brandl, Florian
  • Brandt, Felix
  • Hofbauer, Johannes

Abstract

We consider randomized public good mechanisms with optional participation. Preferences over lotteries are modeled using skew-symmetric bilinear (SSB) utility functions, a generalization of classic von Neumann–Morgenstern utility functions. We show that every welfare-maximizing mechanism entices participation and that the converse holds under additional assumptions. As a corollary, we obtain a characterization of an attractive randomized voting rule that satisfies Condorcet-consistency and entices participation. This stands in contrast to Moulin's well-known no-show paradox (Moulin, 1988), which shows that no deterministic voting rule can satisfy both properties simultaneously.

Suggested Citation

  • Brandl, Florian & Brandt, Felix & Hofbauer, Johannes, 2019. "Welfare maximization entices participation," Games and Economic Behavior, Elsevier, vol. 114(C), pages 308-314.
    • Handle: RePEc:eee:gamebe:v:114:y:2019:i:c:p:308-314
    DOI: 10.1016/j.geb.2019.02.008
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    Cited by:

    1. Felix Brandt & Patrick Lederer & Warut Suksompong, 2022. "Incentives in Social Decision Schemes with Pairwise Comparison Preferences," Papers 2204.12436, arXiv.org, revised Nov 2022.
    2. Martin Bullinger & Chris Dong & Patrick Lederer & Clara Mehler, 2023. "Participation Incentives in Approval-Based Committee Elections," Papers 2312.08798, arXiv.org.

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    More about this item

    Keywords

    SSB utility; No show paradox; Maximal lotteries; Stochastic dominance;
    All these keywords.

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • D6 - Microeconomics - - Welfare Economics

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