IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2301.06206.html

Efficiency in Collective Decision-Making via Quadratic Transfers

Author

Listed:
  • Jon X. Eguia

    (Michigan State U.)

  • Nicole Immorlica

    (Microsoft)

  • Steven P. Lalley

    (U. Chicago)

  • Katrina Ligett

    (Hebrew U.)

  • Glen Weyl

    (Microsoft)

  • Dimitrios Xefteris

    (U. Cyprus)

Abstract

Consider the following collective choice problem: a group of budget constrained agents must choose one of several alternatives. Is there a budget balanced mechanism that: i) does not depend on the specific characteristics of the group, ii) does not require unaffordable transfers, and iii) implements utilitarianism if the agents' preferences are quasilinear and their private information? We study the following procedure: every agent can express any intensity of support or opposition to each alternative, by transferring to the rest of the agents wealth equal to the square of the intensity expressed; and the outcome is determined by the sums of the expressed intensities. We prove that as the group grows large, in every equilibrium of this quadratic-transfers mechanism, each agent's transfer converges to zero, and the probability that the efficient outcome is chosen converges to one.

Suggested Citation

  • Jon X. Eguia & Nicole Immorlica & Steven P. Lalley & Katrina Ligett & Glen Weyl & Dimitrios Xefteris, 2023. "Efficiency in Collective Decision-Making via Quadratic Transfers," Papers 2301.06206, arXiv.org.
    • Handle: RePEc:arx:papers:2301.06206
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2301.06206
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Laurent Bouton, 2013. "A Theory of Strategic Voting in Runoff Elections," American Economic Review, American Economic Association, vol. 103(4), pages 1248-1288, June.
    2. William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, March.
    3. John C. Harsanyi, 1968. "Games with Incomplete Information Played by "Bayesian" Players Part II. Bayesian Equilibrium Points," Management Science, INFORMS, vol. 14(5), pages 320-334, January.
    4. John C. Harsanyi, 1967. "Games with Incomplete Information Played by "Bayesian" Players, I-III Part I. The Basic Model," Management Science, INFORMS, vol. 14(3), pages 159-182, November.
    5. Philip J. Reny, 1999. "On the Existence of Pure and Mixed Strategy Nash Equilibria in Discontinuous Games," Econometrica, Econometric Society, vol. 67(5), pages 1029-1056, September.
    6. Steven P. Lalley & E. Glen Weyl, 2018. "Quadratic Voting: How Mechanism Design Can Radicalize Democracy," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 33-37, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Antonin Macé & Rafael Treibich, 2024. "Repeated Majority Voting," Working Papers halshs-04610689, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sundström, David, 2016. "On Specification and Inference in the Econometrics of Public Procurement," Umeå Economic Studies 931, Umeå University, Department of Economics.
    2. Estrella Alonso & Joaquin Sanchez-Soriano & Juan Tejada, 2015. "A parametric family of two ranked objects auctions: equilibria and associated risk," Annals of Operations Research, Springer, vol. 225(1), pages 141-160, February.
    3. Estrella Alonso & Joaquín Sánchez-Soriano & Juan Tejada, 2020. "Mixed Mechanisms for Auctioning Ranked Items," Mathematics, MDPI, vol. 8(12), pages 1-26, December.
    4. Jon X. Eguia & Dimitrios Xefteris, 2021. "Implementation by Vote-Buying Mechanisms," American Economic Review, American Economic Association, vol. 111(9), pages 2811-2828, September.
    5. Nobel Prize Committee, 2020. "Improvements to auction theory and inventions of new auction formats," Nobel Prize in Economics documents 2020-2, Nobel Prize Committee.
    6. Sundström, David, 2014. "It’s All in the Interval - An imperfect measurements approach to estimate bidders’ primitives in auctions," Umeå Economic Studies 899, Umeå University, Department of Economics, revised 17 Jun 2016.
    7. Zhao, Guo, 2015. "Dynamic Games under Bounded Rationality," MPRA Paper 62688, University Library of Munich, Germany.
    8. Güth, Werner & Pezanis-Christou, Paul, 2015. "Believing in correlated types in spite of independence: An indirect evolutionary analysis," Economics Letters, Elsevier, vol. 134(C), pages 1-3.
    9. Hickman Brent R. & Hubbard Timothy P. & Sağlam Yiğit, 2012. "Structural Econometric Methods in Auctions: A Guide to the Literature," Journal of Econometric Methods, De Gruyter, vol. 1(1), pages 67-106, August.
    10. Helmedag Fritz, 2021. "Basic Bidding Formats: Characteristics and Differences," Review of Economics, De Gruyter, vol. 72(3), pages 183-197, November.
    11. Roger B. Myerson, 2004. "Comments on "Games with Incomplete Information Played by 'Bayesian' Players, I--III Harsanyi's Games with Incoplete Information"," Management Science, INFORMS, vol. 50(12_supple), pages 1818-1824, December.
    12. Garrett van Ryzin & Gustavo Vulcano, 2004. "Optimal Auctioning and Ordering in an Infinite Horizon Inventory-Pricing System," Operations Research, INFORMS, vol. 52(3), pages 346-367, June.
    13. Huseyin Cavusoglu & Srinivasan Raghunathan, 2004. "Configuration of Detection Software: A Comparison of Decision and Game Theory Approaches," Decision Analysis, INFORMS, vol. 1(3), pages 131-148, September.
    14. Jacobovic, Royi & Levy, Yehuda John & Solan, Eilon, 0. "Bayesian games with nested information," Theoretical Economics, Econometric Society.
    15. Giovanni Paolo Crespi & Davide Radi & Matteo Rocca, 2017. "Robust games: theory and application to a Cournot duopoly model," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 40(1), pages 177-198, November.
    16. Andrew M. Colman & Briony D. Pulford, 2015. "Psychology of Game Playing: Introduction to a Special Issue," Games, MDPI, vol. 6(4), pages 1-8, December.
    17. Benjamin Patrick Evans & Mikhail Prokopenko, 2021. "Bounded rationality for relaxing best response and mutual consistency: The Quantal Hierarchy model of decision-making," Papers 2106.15844, arXiv.org, revised Mar 2023.
    18. Che,Y.-K. & Kim,J., 2001. "Know thy enemies : knowledge of rivals' types and its effect on auctions," Working papers 9, Wisconsin Madison - Social Systems.
    19. Fernando Ordóñez & Nicolás E. Stier-Moses, 2010. "Wardrop Equilibria with Risk-Averse Users," Transportation Science, INFORMS, vol. 44(1), pages 63-86, February.
    20. Waśniewski, Krzysztof, 2012. "Local governments’ fiscal policy as a factor of urban development – evidence from Poland," MPRA Paper 39176, University Library of Munich, Germany.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2301.06206. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.