Optimal Mechanism Design without Money

We consider the standard mechanism design environment with linear utility but without monetary transfers. We first establish an equivalence between deterministic, dominant strategy incentive compatible mechanisms and generalized median voter schemes. We then use this equivalence to construct the constrained-efficient optimal mechanism for an utilitarian planner.

[1]  Daniele Condorelli,et al.  What money can't buy: Efficient mechanism design with costly signals , 2012, Games Econ. Behav..

[2]  Alex Gershkov,et al.  On the equivalence of Bayesian and dominant strategy implementation for environments with nonlinear utilities , 2019 .

[3]  Michal Feldman,et al.  Mechanism design on discrete lines and cycles , 2012, EC '12.

[4]  Todd R. Kaplan,et al.  Optimal allocation without transfer payments , 2013, Games Econ. Behav..

[5]  Tymofiy Mylovanov,et al.  Stochastic mechanisms in settings without monetary transfers: The regular case , 2009, J. Econ. Theory.

[6]  Moritz A. Drexl,et al.  Why Voting? A Welfare Analysis , 2018, American Economic Journal: Microeconomics.

[7]  Patrick W. Schmitz,et al.  The (sub-)optimality of the majority rule , 2012, Games Econ. Behav..

[8]  M. Satterthwaite,et al.  Strategy-proofness and single-peakedness , 1976 .

[9]  M. Bagnoli,et al.  Log-concave probability and its applications , 2004 .

[10]  E. Stacchetti,et al.  Multidimensional Mechanism Design for Auctions with Externalities , 1999 .

[11]  Richard P. McLean,et al.  Informational Size and Incentive Compatibility , 2001 .

[12]  Rakesh V. Vohra,et al.  Strategy-proof Location on a Network , 2002, J. Econ. Theory.

[13]  Stephen Ching,et al.  Strategy-proofness and “median voters” , 1998 .

[14]  Salvador Barberà,et al.  On the Weights of Nations: Assigning Voting Weights in a Heterogeneous Union , 2004, Journal of Political Economy.

[15]  Yaron Azrieli,et al.  Pareto Efficiency and Weighted Majority Rules , 2014 .

[16]  M. Satterthwaite Strategy-proofness and Arrow's conditions: Existence and correspondence theorems for voting procedures and social welfare functions , 1975 .

[17]  Tim Roughgarden,et al.  Optimal mechanism design and money burning , 2008, STOC.

[18]  Arunava Sen,et al.  Tops-only domains , 2011 .

[19]  D. Rae,et al.  Decision-Rules and Individual Values in Constitutional Choice , 1969, American Political Science Review.

[20]  Hans Peters,et al.  Strategy-Proof Probabilistic Decision Schemes for One-Dimensional Single-Peaked Preferences , 2002, J. Econ. Theory.

[21]  Klaus Nehring,et al.  The structure of strategy-proof social choice - Part I: General characterization and possibility results on median spaces , 2007, J. Econ. Theory.

[22]  M. Jackson,et al.  Overcoming Incentive Constraints by Linking Decisions , 2007 .

[23]  Yves Sprumont Strategyproof Collective Choice in Economic and Political Environments , 1995 .

[24]  B. Peleg,et al.  Strategy-proof voting schemes with continuous preferences , 1990 .

[25]  Tilman Börgers,et al.  Efficient compromising , 2009, J. Econ. Theory.

[26]  Yves Sprumont The Division Problem with Single-Peaked Preferences: A Characterization of the Uniform Allocation Rule , 1991 .

[27]  Miguel A. Ballester,et al.  On the Justice of Decision Rules , 2011 .

[28]  D. Black On the Rationale of Group Decision-making , 1948, Journal of Political Economy.

[29]  A. Gibbard Manipulation of Voting Schemes: A General Result , 1973 .

[30]  R. Vohra,et al.  Algorithmic Game Theory: Mechanism Design without Money , 2007 .

[31]  Roger B. Myerson,et al.  Optimal Auction Design , 1981, Math. Oper. Res..