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On Robust Constitution Design

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  • Emmanuelle Auriol

    ()

  • Robert Gary-Bobo

    ()

Abstract

We study a class of representation mechanisms, based on reports made by a random subset of agents, called representatives, in a collective choice problem with quasi-linear utilities. We do not assume the existence of a common prior probability describing the distribution of preference types. In addition, there is no benevolent planner. Decisions will be carried out by an individual who cannot be assumed impartial, a self-interested executive. These assumptions impose new constraints on Mechanism Design. A robust mechanism is defined as maximizing expected welfare under a vague prior probability distribution, and over a set of mechanisms which is at the same time immune from opportunistic manipulations by the executive, and compatible with truthful revelation of preferences by representatives. Robust mechanisms are characterized and their existence is shown. Sampling Groves mechanisms are shown to be robust. Copyright Springer Science+Business Media, LLC 2007

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Bibliographic Info

Article provided by Springer in its journal Theory and Decision.

Volume (Year): 62 (2007)
Issue (Month): 3 (May)
Pages: 241-279

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Handle: RePEc:kap:theord:v:62:y:2007:i:3:p:241-279

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Web page: http://www.springerlink.com/link.asp?id=100341

Related research

Keywords: collective choice; incomplete information; mechanism design; representative democracy; D7; D8; H0;

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References

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  1. Emmanuelle Auriol & Robert Gary-Bobo, 2012. "On the optimal number of representatives," Public Choice, Springer, vol. 153(3), pages 419-445, December.
  2. Dirk Bergemann & Stephen Morris, 2003. "Robust Mechanism Design," Levine's Bibliography 666156000000000035, UCLA Department of Economics.
  3. Kim-Sau Chung & Jeffrey C. Ely, 2003. "Foundations of Dominant Strategy Mechanisms," Discussion Papers 1372, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  4. Moulin,Hervi, 1991. "Axioms of Cooperative Decision Making," Cambridge Books, Cambridge University Press, number 9780521424585.
  5. Maskin, Eric & Moore, John, 1999. "Implementation and Renegotiation," Review of Economic Studies, Wiley Blackwell, vol. 66(1), pages 39-56, January.
  6. Louis Makowski & Joseph M. Ostroy, 1984. "Vickrey-Clarke-Groves Mechanisms and Perfect Competition," UCLA Economics Working Papers 333, UCLA Department of Economics.
  7. Holmstrom, Bengt, 1979. "Groves' Scheme on Restricted Domains," Econometrica, Econometric Society, vol. 47(5), pages 1137-44, September.
  8. Green, Jerry & Laffont, Jean-Jacques, 1977. "Characterization of Satisfactory Mechanisms for the Revelation of Preferences for Public Goods," Econometrica, Econometric Society, vol. 45(2), pages 427-38, March.
  9. Gordon Tullock, 1977. "Practical problems and practical solutions," Public Choice, Springer, vol. 29(2), pages 27-35, March.
  10. Ilya Segal, 2003. "Optimal Pricing Mechanisms with Unknown Demand," American Economic Review, American Economic Association, vol. 93(3), pages 509-529, June.
  11. Laffont, Jean-Jacques & Martimort, David, 1998. "Mechanism Design with Collusion and Correlation," IDEI Working Papers 81, Institut d'Économie Industrielle (IDEI), Toulouse.
  12. Bengt Holmstrom & Roger B. Myerson, 1981. "Efficient and Durable Decision Rules with Incomplete Information," Discussion Papers 495, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  13. Dennis Mueller & Robert Tollison & Thomas Willett, 1972. "Representative democracy via random selection," Public Choice, Springer, vol. 12(1), pages 57-68, March.
  14. Ledyard, John O., 1978. "Incentive compatibility and incomplete information," Journal of Economic Theory, Elsevier, vol. 18(1), pages 171-189, June.
  15. Palfrey, Thomas R. & Srivastava, Sanjay, 1991. "Efficient trading mechanisms with pre-play communication," Journal of Economic Theory, Elsevier, vol. 55(1), pages 17-40, October.
  16. Groves, Theodore, 1973. "Incentives in Teams," Econometrica, Econometric Society, vol. 41(4), pages 617-31, July.
  17. R. J. Gary-Bobo & T. Jaaidane, 1996. "Polling mechanisms and the demand revelation problem," THEMA Working Papers 96-31, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  18. Auriol, Emmanuelle & Gary-Bobo, Robert, 2001. "On Robust Constitution Design," IDEI Working Papers 136, Institut d'Économie Industrielle (IDEI), Toulouse, revised Aug 2006.
  19. Moulin, H., 1986. "Characterizations of the pivotal mechanism," Journal of Public Economics, Elsevier, vol. 31(1), pages 53-78, October.
  20. Hagerty, Kathleen M. & Rogerson, William P., 1987. "Robust trading mechanisms," Journal of Economic Theory, Elsevier, vol. 42(1), pages 94-107, June.
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Citations

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Cited by:
  1. Emmanuelle Auriol & Robert J. Gary-Bobo, 1998. "On the Optimal Number of Representatives," Discussion Papers 1286, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  2. Felix Bierbrauer & Marco Sahm, 2006. "Informative Voting and the Samuelson Rule," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2006_18, Max Planck Institute for Research on Collective Goods.
  3. Bierbrauer, Felix & Sahm, Marco, 2006. "Informative Voting and the Samuelson Rule," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 159, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  4. Auriol, Emmanuelle & Gary-Bobo, Robert J., 2002. "On Robust Constitution Design," CEPR Discussion Papers 3303, C.E.P.R. Discussion Papers.

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