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Strategy-Proof Rule in Probabilistic Allocation Problem of an Indivisible Good and Money

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  • Kazuhiko Hashimoto

Abstract

We consider the problem of probabilistically allocating a single indivisible good among agents when monetary transfers are allowed. We construct a new strategy-proof rule, called the second price trading rule, and show that it is second best efficient. Furthermore, we give the second price trading rule three characterizations with (1) strategy-proofness, "budget-balance", equal treatment of equals, weak decision-efficiency, and simple generatability, (2) strategy-proofness, "equal rights lower bound", equal treatment of equals, weak decision-efficiency, and simple generatability, (3) strategy-proofness, "envy-freeness, no-trade-no-transfer", equal treatment of equals, weak decision-efficiency, and simple generatability.

Suggested Citation

  • 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, Osaka University.
  • Handle: RePEc:dpr:wpaper:0931
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    Cited by:

    1. Debasis Mishra & Tridib Sharma, 2018. "A simple budget-balanced mechanism," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 50(1), pages 147-170, January.
    2. Long, Yan & Mishra, Debasis & Sharma, Tridib, 2017. "Balanced ranking mechanisms," Games and Economic Behavior, Elsevier, vol. 105(C), pages 9-39.
    3. Kazuhiko Hashimoto & Yu Nakayama, 2016. "Strategy-Proofness on Bankruptcy Problems with an Indivisible Object," ISER Discussion Paper 0961, Institute of Social and Economic Research, Osaka University.

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