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Binary public decisions and undominated mechanisms

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  • Athanasiou, Efthymios
  • Valletta, Giacomo

Abstract

We address the problem of choosing between two public alternatives under the assumption that preferences are quasi-linear. We characterize the class of strategy-proof, anonymous and feasible mechanisms that are undominated, that exhibit a minimal degree of neutrality towards the two alternatives and that do not allow for positive monetary transfers to agents whose preferred alternative is selected. The Pivotal mechanism is the only decision-efficient member of the class. A family of voting mechanisms which do not perform monetary transfers are the only budget-balanced members of the class.

Suggested Citation

  • Athanasiou, Efthymios & Valletta, Giacomo, 2021. "Binary public decisions and undominated mechanisms," Journal of Economic Theory, Elsevier, vol. 198(C).
    • Handle: RePEc:eee:jetheo:v:198:y:2021:i:c:s0022053121001721
    DOI: 10.1016/j.jet.2021.105355
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    References listed on IDEAS

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    1. Hervé Moulin, 1987. "The Pure Compensation Problem: Egalitarianism Versus Laissez-Fairism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(4), pages 769-783.
    2. Efthymios Athanasiou & Giacomo Valletta, 2021. "Undominated mechanisms and the provision of a pure public good in two agent economies," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 57(4), pages 763-795, November.
    3. Sprumont, Yves, 2013. "Constrained-optimal strategy-proof assignment: Beyond the Groves mechanisms," Journal of Economic Theory, Elsevier, vol. 148(3), pages 1102-1121.
    4. William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, March.
    5. Athanasiou, Efthymios, 2013. "A Solomonic solution to the problem of assigning a private indivisible good," Games and Economic Behavior, Elsevier, vol. 82(C), pages 369-387.
    6. Moulin, H., 1986. "Characterizations of the pivotal mechanism," Journal of Public Economics, Elsevier, vol. 31(1), pages 53-78, October.
    7. Groves, Theodore, 1973. "Incentives in Teams," Econometrica, Econometric Society, vol. 41(4), pages 617-631, July.
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    Cited by:

    1. Efthymios Athanasiou & Giacomo Valletta, 2021. "Undominated mechanisms and the provision of a pure public good in two agent economies," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 57(4), pages 763-795, November.

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    More about this item

    Keywords

    Undominated mechanisms; Binary public decisions; Strategy-proofness; Decision efficiency; Budget-balance;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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