Collective Choice under Dichotomous Preferences
Agents partition deterministic outcomes into good or bad. A direct revelation mechanism selects a lottery over outcomes - also interpreted as time-shares. Under such dichotomous preferences, the probability that the lottery outcome be a good one is a canonical utility representation. The utilitarian mechanism averages over all deterministic outcomes "approved" by the largest number of agents. It is efficient, strategy-proof and treats equally agents and outcomes. We reach the impossibility frontier if we also place the lower bound 1/n on each agent's utility, where n is the number of agents; or if this lower bound is the fraction of good outcomes to feasible outcomes. We conjecture that no ex-ante efficient and strategy-proof mechanism guarantees a strictly positive utility to all agents at all profiles, and prove a weaker version of this conjecture.
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UFAE and IAE Working Papers
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2001-03, Rice University, Department of Economics.
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