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Strategy-proofness in linear production economies with homothetic or quasi-linear preferences

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  • Wataru Ishida

    (University of Rochester)

Abstract

In an economy with linear production, under a richness condition on the domain of preferences, efficiency, equal treatment of equals, and strategy-proofness are compatible. We characterize the rules satisfying the three properties. They are “equal-income Walrasian rules”, selections from the equal-income Walrasian correspondence. Important domains of preferences (e.g. homothetic preferences and quasi-linear preferences) satisfy the condition. These domains are important, yet they are not covered by Maniquet and Sprumont (Econ. Theory 14(3):583–595, 1999) who characterize the same family of rules on a different domain. Our condition and theirs are logically independent.

Suggested Citation

  • Wataru Ishida, 2023. "Strategy-proofness in linear production economies with homothetic or quasi-linear preferences," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 11(1), pages 121-130, April.
    • Handle: RePEc:spr:etbull:v:11:y:2023:i:1:d:10.1007_s40505-023-00246-6
    DOI: 10.1007/s40505-023-00246-6
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    References listed on IDEAS

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    1. Barbera, Salvador & Jackson, Matthew O. & Neme, Alejandro, 1997. "Strategy-Proof Allotment Rules," Games and Economic Behavior, Elsevier, vol. 18(1), pages 1-21, January.
    2. Leroux, Jistin, 2004. "Strategy-Proofness and Efficiency Are Incompatible in Production Economies," Working Papers 2004-07, Rice University, Department of Economics.
    3. François Maniquet & Yves Sprumont, 1999. "Efficient strategy-proof allocation functions in linear production economies," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 14(3), pages 583-595.
    4. Maniquet, Francois, 1996. "Horizontal equity and stability when the number of agents is variable in the fair division problem," Economics Letters, Elsevier, vol. 50(1), pages 85-90, January.
    5. Leroux, Justin, 2004. "Strategy-proofness and efficiency are incompatible in production economies," Economics Letters, Elsevier, vol. 85(3), pages 335-340, December.
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    More about this item

    Keywords

    Linear production; Walrasian solution; Efficiency; Equal treatment of equals; Strategy-proofness; Homothetic; Quasi-linear;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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