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Falsification-proof non-market allocation mechanisms

Author

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  • Eduardo Perez-Richet
  • Vasiliki Skreta

Abstract

Relying on manipulable characteristics to target the allocation of resources is fraught with difficulties. Naively optimal rules lead to falsification and allocative inefficiency. Optimizing the rule for allocative efficiency while accounting for falsification typically induces falsification, at a heavy cost to the agents. Moreover, falsification generates negative externalities. We characterize optimal falsification-proof rules under a broad range of falsification technologies. We also provide an honesty condition under which they solve the unconstrained problem of a planner who maximizes a weighted sum of allocative surplus and agents' welfare.

Suggested Citation

  • Eduardo Perez-Richet & Vasiliki Skreta, 2026. "Falsification-proof non-market allocation mechanisms," Papers 2610.18625, arXiv.org, revised Oct 2026.
    • Handle: RePEc:arx:papers:2610.18625
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    File URL: https://arxiv.org/pdf/2610.18625
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    References listed on IDEAS

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    1. Erlanson, Albin & Kleiner, Andreas, 2019. "A note on optimal allocation with costly verification," Journal of Mathematical Economics, Elsevier, vol. 84(C), pages 56-62.
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