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When can we design efficient and strategy-proof rules in package assignment problems?

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  • Tomoya KAZUMURA

Abstract

We examine the compatibility of efficiency and strategy-proofness in a package assignment model where preferences may not be quasi-linear. Given r 2 R, a preference relation is r-partially quasi-linear if it is quasi-linear over the set of (consumption) bundles where each bundle is at least as desirable as receiving no object and paying r, and the payment at each bundle is at least r. We show that if a domain includes r-partially quasi-linear domain, then no rule is efficient and strategy-proof. We also show that if there is a rule that satisfies efficiency, strategy-proofness, individual rationality, and no subsidy for losers on a domain, the domain must be a subset of the (0-)partially quasi-linear domain. Our results demonstrate that the quasi-linearity of preferences plays an important role to design an efficient and strategy-proof rule.

Suggested Citation

  • Tomoya KAZUMURA, 2020. "When can we design efficient and strategy-proof rules in package assignment problems?," Discussion papers e-21-008, Graduate School of Economics , Kyoto University.
    • Handle: RePEc:kue:epaper:e-21-008
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    More about this item

    Keywords

    Strategy-proofness; efficiency; non-quasi-linear preferences; par-tially quasi-linear preferences; generalized Vickrey rule; maximal domain;
    All these keywords.

    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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