Strategy-proofness versus efficiency on restricted domains of exchange economies
Strategy-proofness has been shown to be a strong property, particularly on large domains of preferences. We therefore examine the existence of strategy-proof and efficient solutions on restricted, 2-person domains of exchange economies. On the class of 2-person exchange economies in which agents have homothetic, strictly convex preferences we show, as Zhou (1991) did for a larger domain, that such a solution is necessarily dictatorial. As this proof requires preferences exhibiting high degrees of complementarity, our search continues to a class of linear preferences. Even on this "small" domain, the same negative result holds. These two results are extended to many superdomains, including Zhou's.
Volume (Year): 14 (1996)
Issue (Month): 1 ()
|Note:||Received: 9 June 1995/Accepted: 8 January 1996|
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