The Linking of Collective Decisions and Efficiency

Matthew O. Jackson () and Hugo F. Sonnenschein

Microeconomics from EconWPA

Abstract: For groups that must make several decisions of similar form, we define a simple and general mechanism that is designed to promote social efficiency. The mechanism links the various decisions by forcing agents to budget their representations of preferences so that the frequency of preferences across problems conforms to the underlying distribution of preferences. We show that as the mechanism operates over a growing number decisions, the welfare costs of incentive constraints completely disappear. In addition, as the number of decisions being linked grows, a truthful strategy is increasingly successful and secures the efficient utility level for an agent.

Keywords: linking decisions; mechanism design; incentives; incentive compatibility; bundling (search for similar items in EconPapers)
JEL-codes: C72 D71 D72 D74 D78 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-gth and nep-mic
Date: 2003-03-28
Note: Type of Document - ; figures: included
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http://129.3.20.41/eps/mic/papers/0303/0303007.pdf (application/pdf)

Related works:
Working Paper: The Linking of Collective Decisions and Efficiency (2003)
Working Paper: The Linking of Collective Decisions and Efficiency (2003)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpmi:0303007

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