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Characterizations of Pareto-efficient, fair, and strategy-proof allocation rules in queueing problems

  • RAMAEKERS, Eve

    (Université catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE))

  • KAYI, Cagatay

A set of agents with possibly different waiting costs have to receive the same service one after the other. Efficiency requires to maximize total welfare. Equity requires to at least treat equal agents equally. One must form a queue, set up monetary transfers to compensate agents having to wait, and not a priori arbitrarily exclude agents from positions. As one may not know agents’ waiting costs, they may have no incentive to reveal them. We identify the only rule satisfying Pareto-efficiency, a weak equity axiom as equal treatment of equals in welfare or symmetry, and strategy-proofness. It satisfies stronger axioms, as no-envy and anonymity. Further, its desirability extends to related problems. To obtain these results, we prove that even non-single-valued rules satisfy Pareto-efficiency of queues and strategy-proofness if and only if they select Pareto-efficient queues and set transfers in the spirit of Groves (1973). This holds in other problems, provided the domain of quasi-linear preferences is rich enough.

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2008084.

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Date of creation: 01 Dec 2008
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Handle: RePEc:cor:louvco:2008084
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