Limitation of Efficiency: Strategy-Proofness and Single-Peaked Preferences with Many Commodities
In this paper, we study a resource allocation problem of economies with many commodities and single-peaked preferences. It is known that the uniform rule is the unique allocation mechanism satisfying strategy-proofness, Pareto efficiency and anonymity, if the number of good is only one and preferences are single peaked. (Sprumont .) However, if the number of goods is greater than one, the situation drastically changes and a tradeoff between efficiency and strategy-proofness arises. The generalized uniform rule in multiple-commodity settings is still strategy-proof, but not Pareto efficient in general. In this paper, we show that in a class of all strategy-proof mechanisms the generalized uniform rule is a "second best" strategy-proof mechanism in that there is no other strategy-proof mechanism which gives a "better" outcome than the generalized uniform rule in terms of Pareto domination.
|Date of creation:||Feb 2003|
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- Serizawa, Shigehiro & Weymark, John A., 2003.
"Efficient strategy-proof exchange and minimum consumption guarantees,"
Journal of Economic Theory,
Elsevier, vol. 109(2), pages 246-263, April.
- Shigehiro Serizawa & John A. Weymark, 2002. "Efficient Strategy-Proof Exchange and Minimum Consumption Guarantees," Vanderbilt University Department of Economics Working Papers 0216, Vanderbilt University Department of Economics, revised Aug 2002.
- Lin Zhou, 1990. "Inefficiency of Strategy-Proof Allocation Mechanisms in Pure Exchange Economies," Cowles Foundation Discussion Papers 954, Cowles Foundation for Research in Economics, Yale University.
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