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Robust mechanism design and dominant strategy voting rules

  • Börgers, Tilman

    ()

    (Department of Economics, University of Michigan)

  • Smith, Doug

    ()

    (Federal Trade Commission)

We develop an analysis of voting rules that is robust in the sense that we do not make any assumption regarding voters' knowledge about each other. In dominant strategy voting rules, voters' behavior can be predicted uniquely without making any such assumption. However, on full domains, the only dominant strategy voting rules are random dictatorships. We show that the designer of a voting rule can achieve Pareto improvements over random dictatorship by choosing rules in which voters' behavior can depend on their beliefs. The Pareto improvement is achieved for all possible beliefs. The mechanism that we use to demonstrate this result is simple and intuitive, and the Pareto improvement result extends to all equilibria of the mechanism that satisfy a mild refinement. We also show that the result only holds for voters' interim expected utilities, not for their ex post expected utilities.

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Article provided by Econometric Society in its journal Theoretical Economics.

Volume (Year): 9 (2014)
Issue (Month): 2 (May)
Pages:

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Handle: RePEc:the:publsh:1111
Contact details of provider: Web page: http://econtheory.org

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  1. Schmitz, Patrick W. & Tröger, Thomas, 2012. "The (sub-)optimality of the majority rule," Games and Economic Behavior, Elsevier, vol. 74(2), pages 651-665.
  2. Börgers, Tilman & Postl, Peter, 2009. "Efficient compromising," Journal of Economic Theory, Elsevier, vol. 144(5), pages 2057-2076, September.
  3. Jackson, Matthew O., 1999. "A Crash Course in Implementation Theory," Working Papers 1076, California Institute of Technology, Division of the Humanities and Social Sciences.
  4. Kim-Sau Chung & Jeffrey C. Ely, 2003. "Foundations of Dominant Strategy Mechanisms," Discussion Papers 1372, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  5. Bhaskar Dutta & Hans Peters & Arunava Sen, 2007. "Strategy-proof Cardinal Decision Schemes," Social Choice and Welfare, Springer, vol. 28(1), pages 163-179, January.
  6. Salvador Barberà, 2010. "Strategy-proof social choice," Working Papers 420, Barcelona Graduate School of Economics.
  7. Holmstrom, Bengt & Myerson, Roger B, 1983. "Efficient and Durable Decision Rules with Incomplete Information," Econometrica, Econometric Society, vol. 51(6), pages 1799-819, November.
  8. Blin, Jean-Marie & Satterthwaite, Mark A, 1977. "On Preferences, Beliefs, and Manipulation within Voting Situations," Econometrica, Econometric Society, vol. 45(4), pages 881-88, May.
  9. Tilman Borgers & Doug Smith, 2012. "Robustly Ranking Mechanisms," American Economic Review, American Economic Association, vol. 102(3), pages 325-29, May.
  10. Stephen Morris & Dirk Bergemann, 2004. "Robust Mechanism Design," Yale School of Management Working Papers ysm380, Yale School of Management.
  11. Gibbard, Allan, 1973. "Manipulation of Voting Schemes: A General Result," Econometrica, Econometric Society, vol. 41(4), pages 587-601, July.
  12. Jobst Heitzig & Forest Simmons, 2012. "Some chance for consensus: voting methods for which consensus is an equilibrium," Social Choice and Welfare, Springer, vol. 38(1), pages 43-57, January.
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