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Truth and Envy in Capacitated Allocation Games

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Listed:
  • Edith Cohen
  • Michal Feldman
  • Amos Fiat
  • Haim Kaplan
  • Svetlana Olonetsky

Abstract

We study auctions with additive valuations where agents have a limit on the number of items they may receive. We refer to this setting as capacitated allocation games. We seek truthful and envy free mechanisms that maximize the social welfare. I.e., where agents have no incentive to lie and no agent seeks to exchange outcomes with another. In 1983, Leonard showed that VCG with Clarke Pivot payments (which is known to be truthful, individually rational, and have no positive transfers), is also an envy free mechanism for the special case of n items and n unit capacity agents. We elaborate upon this problem and show that VCG with Clarke Pivot payments is envy free if agent capacities are all equal. When agent capacities are not identical, we show that there is no truthful and envy free mechanism that maximizes social welfare if one disallows positive transfers. For the case of two agents (and arbitrary capacities) we show a VCG mechanism that is truthful, envy free, and individually rational, but has positive transfers. We conclude with a host of open problems that arise from our work.

Suggested Citation

  • Edith Cohen & Michal Feldman & Amos Fiat & Haim Kaplan & Svetlana Olonetsky, 2010. "Truth and Envy in Capacitated Allocation Games," Discussion Paper Series dp540, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
    • Handle: RePEc:huj:dispap:dp540
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    References listed on IDEAS

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    1. Herve Moulin, 2004. "Fair Division and Collective Welfare," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633116, December.
    2. Eric S. Maskin, 1987. "On the Fair Allocation of Indivisible Goods," Palgrave Macmillan Books, in: George R. Feiwel (ed.), Arrow and the Foundations of the Theory of Economic Policy, chapter 11, pages 341-349, Palgrave Macmillan.
    3. Claus-Jochen Haake & Matthias G. Raith & Francis Edward Su, 2002. "Bidding for envy-freeness: A procedural approach to n-player fair-division problems," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 19(4), pages 723-749.
    4. Leonard, Herman B, 1983. "Elicitation of Honest Preferences for the Assignment of Individuals to Positions," Journal of Political Economy, University of Chicago Press, vol. 91(3), pages 461-479, June.
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