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Simple Allocation with Correlated Types

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  • Axel Niemeyer
  • Justus Preusser

Abstract

An object is allocated among a number of agents. The optimal allocation depends on the agents’ information about their peers, but each agent wants the object for themself. Monetary transfers are unavailable. We consider mechanisms where it is a dominant strategy to report truthfully. We show that deterministic mechanisms do not generally suffice for implementation and optimality, and that anonymous mechanisms cannot meaningfully elicit information. However, there are simple mechanisms—jury mechanisms—that are optimal when there are three or fewer agents, approximately optimal in symmetric environments with many agents, and the only deterministic mechanisms satisfying a relaxed anonymity notion. In a jury mechanism, each agent is either a juror or a candidate. The jurors decide which candidate wins the object, but jurors never win.

Suggested Citation

  • Axel Niemeyer & Justus Preusser, 2023. "Simple Allocation with Correlated Types," CRC TR 224 Discussion Paper Series crctr224_2023_486, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2023_486
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp486
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    References listed on IDEAS

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    More about this item

    Keywords

    Mechanism design without transfers; correlation; peer selection;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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