Collective decision through an informed mediator

Yunan Li and Xingtan Zhang

Journal of Economic Theory, 2024, vol. 218, issue C

Abstract: An imperfectly informed mediator (or mechanism designer) must make a decision on behalf of a group of agents, who are privately informed about their valuations attached to the decision. The mediator chooses a mechanism before observing a signal about the agents' valuations and commits to truthfully using this information in the mechanism. We give a necessary and sufficient condition on the mediator's information under which the ex post efficient decision rule can be implemented by an ex ante budget balanced, dominant strategy incentive-compatible and ex post individually rational mechanism. In a large economy, we show that the amount of information that the mediator needs to know about each agent to achieve ex post efficiency is bounded as the number of agents grows to infinity.

Keywords: Collective decision; Provision of public goods; Asymmetric information; Cross-subsidization mechanism (search for similar items in EconPapers)
JEL-codes: C70 D70 D82 G38 H41 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022053124000231
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:218:y:2024:i:c:s0022053124000231

DOI: 10.1016/j.jet.2024.105817

Access Statistics for this article

Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell

More articles in Journal of Economic Theory from Elsevier
Bibliographic data for series maintained by Catherine Liu ().