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Arrovian efficiency and auditability in the allocation of discrete resources


Pycia, Marek; Ünver, M Utku (2020). Arrovian efficiency and auditability in the allocation of discrete resources. Discussion Paper Series DP15377, CEPR.

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.

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.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:C78, D78
Uncontrolled Keywords:Industrial organization
Language:English
Date:17 October 2020
Deposited On:18 Dec 2020 07:02
Last Modified:18 Dec 2020 07:02
Series Name:Discussion Paper Series
Number of Pages:32
ISSN:0265-8003
OA Status:Green
Free access at:Official URL. An embargo period may apply.
Official URL:http://cepr.org/active/publications/discussion_papers/dp.php?dpno=15377

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