Working Paper: CEPR ID: DP3303
Authors: Emmanuelle Auriol; Robert Garybobo
Abstract: We study a class of representation mechanisms, based on reports made by a random subset of agents, called representatives, in a collective choice problem with quasi-linear utilities. We do not assume the existence of a common prior probability describing the distribution of preference types. In addition, there is no benevolent planner. An individual who cannot be assumed impartial, a self-interested executive, will carry out decisions. These assumptions impose new constraints on Mechanism Design. A robust mechanism is defined as maximizing expected welfare under a vague prior probability distribution, and over a set of mechanisms which is at the same time immune from opportunistic manipulations by the executive, and compatible with truthful revelation of preferences by representatives. Robust mechanisms are characterized and their existence is shown. Sampling Groves mechanisms are shown to be robust.
Keywords: collective choice; incomplete information; mechanism design; representative democracy
JEL Codes: D70; D80; H00
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| robust mechanism (D47) | maximizes expected welfare (D69) |
| robust mechanism (D47) | immune to opportunistic manipulations by a self-interested executive (D73) |
| capacity to ensure truthful revelation of preferences by representatives (D72) | robustness of mechanism (D47) |
| incentive structures of representatives (D72) | capacity to ensure truthful revelation of preferences by representatives (D72) |
| Groves mechanisms (L64) | robustness of decision-making processes (D70) |
| lack of common prior distributions among agents (D80) | expected outcomes of collective decisions (D70) |