Rationing a Commodity Along Fixed Paths

Herve Moulin ()

No 98-01, Working Papers from Duke University, Department of Economics

Abstract: A private commodity is divided among agents with single peaked preferences over their share. A rationing method elicits individual peaks (demands); if the commodity is overdemanded (resp. underdemanded), no agent receives more (resp. less) than his peak. A fixed path rationing method allocates an overdemanded "good" along a path independent of individual demands, except that an agent receives exactly his demand if it is below the path-generated share. An underdemanded "bad" is allocated along another such path, except that an agent who demands more than his path-generated share receives exactly his peak. We consider four properties of allocation mechanisms: efficiency, strategyproofness, resource monotonicity, and consistency. Together, these axioms characterize precisely the set of fixed path rationing methods. The result holds when the commodity is infinitely divisible and when it comes in indivisible units.

JEL-codes: D63 D70 (search for similar items in EconPapers)
Date: 1998

Published in JOURNAL OF ECONOMIC THEORY, Vol. 84, 1999, pages 41-72.

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