Monotonic transformation of preferences and Walrasian equilibrium in allocation problems

Francisco Robles (), Marina Núñez () and Laura Robles ()
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Francisco Robles: Universitat de Barcelona
Marina Núñez: Universitat de Barcelona
Laura Robles: Competition Economists Group, Universitat de Barcelona

No 2024/478, UB School of Economics Working Papers from University of Barcelona School of Economics

Abstract: This paper investigates (non-)manipulability properties and welfare effects of Walrasian equilibrium rules in object allocation problems with non-quasi-linear preferences. We focus on allocation problems with indivisible and different objects. The agents are interested in acquiring at most one object. We show that the minimum Walrasian equilibrium rule is the unique rule that is non-manipulable via monotonic transformations at the outside option among the set of Walrasian equilibrium rules. Analogously, we also show that the minimum Walrasian equilibrium rule is also the unique Walrasian equilibrium rule that is non-manipulable by pretending to be single-minded. On the domain of quasi-linear preferences, we introduce a novel axiom: welfare parity for uncontested objects. On this domain, this axiom is enough to characterize the minimum Walrasian equilibrium rule among the set of Walrasian equilibrium rules.

Keywords: Strategy-proofness; monotonic transformations; Walrasian equilibrium (search for similar items in EconPapers)
JEL-codes: D44 D47 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2024
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