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Efficiency, strategy-proofness, and essentially quasi-linear preferences

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  • Tomoya KAZUMURA

Abstract

We examine the compatibility of efficiency and strategy-proofness in a pack- age assignment model with transfers where preferences may not be quasi-linear. A preference relation is essentially quasi-linear if it is quasi-linear over the set of (consumption) bundles that are at least as desirable as receiving no object and paying nothing, and at which payments are nonnegative. We show that if a domain contains the essentially quasi-linear domain, then no mechanism is efficient and strategy-proof. We also show that if there is a mechanism that satis es efficiency, strategy-proofness, individual rationality, and no subsidy for losers on a domain, the domain must be contained in the essentially quasi-linear domain. Our results demonstrate that the quasi-linearity of preferences is es- sential for the design of an efficient and strategy-proof mechanism. Our results also have implications for the public goods model with transfers.

Suggested Citation

  • Tomoya KAZUMURA, 2026. "Efficiency, strategy-proofness, and essentially quasi-linear preferences," Discussion papers e-21-008-v2, Graduate School of Economics , Kyoto University.
    • Handle: RePEc:kue:epaper:e-21-008-v2
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    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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