Working Paper: CEPR ID: DP15377
Authors: Marek Pycia; M. Utku Unver
Abstract: In environments where heterogeneous indivisible resources are being allocated without monetary transfers and each agent has a unit demand, we show that an allocation mechanism is individually strategy-proof and Arrovian efficient, i.e., it always selects the best outcome with respect to some Arrovian social welfare function if, and only if, the mechanism is group strategy-proof and Pareto efficient. Re-interpreting Arrow's Independence of Irrelevant Alternatives in terms of auditability of the mechanism, we further show that these are precisely the mechanisms that are strategy-proof, Pareto efficient, and auditable.
Keywords: Individual Strategyproofness; Group Strategyproofness; Pareto Efficiency; Arrovian Preference Aggregation; Matching; No-Transfer Allocation and Exchange
JEL Codes: C78; D78
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| individually strategyproof and Arrovian efficient (C71) | group strategyproof and Pareto efficient (C71) |
| group strategyproof and Pareto efficient (C71) | individually strategyproof and Arrovian efficient (C71) |
| Arrovian efficiency (D61) | auditability (M42) |
| auditability (M42) | independence of irrelevant alternatives (IIA) (D10) |
| individually strategyproof and Pareto efficient mechanisms (D47) | mechanisms satisfying equivalent conditions of main theorem (C62) |
| serial dictatorship mechanism (D73) | group strategyproof and Arrovian efficient (C71) |