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A Bayesian Incentive Compatible Mechanism for Fair Division

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  • Yuji Fujinaka

Abstract

We consider the problem of fairly allocating one indivisible object when monetary transfers are possible, and examine the existence of Bayesian incentive compatible mechanisms to solve the problem. We propose a mechanism that satisfies envy-freeness, budget balancedness, and Bayesian incentive compatibility. Further, we establish the uniqueness of the mechanism under an order additivity condition. This result contrasts well with various results on the incompatibility between efficiency and ex post incentive compatibility.

Suggested Citation

  • Yuji Fujinaka, 2008. "A Bayesian Incentive Compatible Mechanism for Fair Division," ISER Discussion Paper 0721, Institute of Social and Economic Research, The University of Osaka.
    • Handle: RePEc:dpr:wpaper:0721
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    File URL: https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2008/DP0721.pdf
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    References listed on IDEAS

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    1. Sakai, Toyotaka, 2007. "Fairness and implementability in allocation of indivisible objects with monetary compensations," Journal of Mathematical Economics, Elsevier, vol. 43(5), pages 549-563, June.
    2. Fieseler, Karsten & Kittsteiner, Thomas & Moldovanu, Benny, 2003. "Partnerships, lemons, and efficient trade," Journal of Economic Theory, Elsevier, vol. 113(2), pages 223-234, December.
    3. Yuji Fujinaka & Toyotaka Sakai, 2007. "The Manipulability of Fair Solutions in Assignment of an Indivisible Object with Monetary Transfers," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(6), pages 993-1011, December.
    4. Ando, Kazutoshi & Kato, Miki & Ohseto, Shinji, 2008. "Strategy-proof and symmetric allocation of an indivisible good," Mathematical Social Sciences, Elsevier, vol. 55(1), pages 14-23, January.
    5. Fujinaka, Yuji & Sakai, Toyotaka, 2007. "Maskin monotonicity in economies with indivisible goods and money," Economics Letters, Elsevier, vol. 94(2), pages 253-258, February.
    6. Azacis, Helmuts, 2008. "Double implementation in a market for indivisible goods with a price constraint," Games and Economic Behavior, Elsevier, vol. 62(1), pages 140-154, January.
    7. Shinji Ohseto, 2000. "Strategy-proof and efficient allocation of an indivisible good on finitely restricted preference domains," International Journal of Game Theory, Springer;Game Theory Society, vol. 29(3), pages 365-374.
    8. Shinji Ohseto, 2006. "Characterizations of strategy-proof and fair mechanisms for allocating indivisible goods," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 29(1), pages 111-121, September.
    9. Bochet, Olivier & Sakai, Toyotaka, 2007. "Strategic manipulations of multi-valued solutions in economies with indivisibilities," Mathematical Social Sciences, Elsevier, vol. 53(1), pages 53-68, January.
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    Cited by:

    1. Kazuhiko Hashimoto, 2015. "Strategy-Proof Rule in Probabilistic Allocation Problem of an Indivisible Good and Money," ISER Discussion Paper 0931, Institute of Social and Economic Research, The University of Osaka.
    2. Kazuhiko Hashimoto & Yu Nakayama, 2016. "Strategy-Proofness on Bankruptcy Problems with an Indivisible Object," ISER Discussion Paper 0961, Institute of Social and Economic Research, The University of Osaka.

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