Second-best efficiency of allocation rules: strategy-proofness and single-peaked preferences with multiple commodities
We study strategy-proof allocation rules in economies with perfectly divisible multiple commodities and single-peaked preferences. In this setup, it is known that the incompatibility among strategy-proofness, Pareto efficiency and non-dictatorship arises in contrast with the Sprumont (Econometrica 59:509–519, 1991 ) one commodity model. We first investigate the existence problem of strategy-proof and second-best efficient rules, where a strategy-proof rule is second-best efficient if it is not Pareto-dominated by any other strategy-proof rules. We show that there exists an egalitarian rational (consequently, non-dictatorial) strategy-proof rule satisfying second-best efficiency. Second, we give a new characterization of the generalized uniform rule with the second-best efficiency in two-agent case. Copyright Springer-Verlag Berlin Heidelberg 2013
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Volume (Year): 54 (2013)
Issue (Month): 3 (November)
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