Efficiency, strategy-proofness, and essentially quasi-linear preferences

Tomoya Kazumura

Discussion papers from Graduate School of Economics , Kyoto University

Abstract: We examine the compatibility of efficiency and strategy-proofness in a pack- age assignment model with transfers where preferences may not be quasi-linear. A preference relation is essentially quasi-linear if it is quasi-linear over the set of (consumption) bundles that are at least as desirable as receiving no object and paying nothing, and at which payments are nonnegative. We show that if a domain contains the essentially quasi-linear domain, then no mechanism is efficient and strategy-proof. We also show that if there is a mechanism that satis es efficiency, strategy-proofness, individual rationality, and no subsidy for losers on a domain, the domain must be contained in the essentially quasi-linear domain. Our results demonstrate that the quasi-linearity of preferences is es- sential for the design of an efficient and strategy-proof mechanism. Our results also have implications for the public goods model with transfers.

Keywords: Strategy-proofness; efficiency; non-quasi-linear preferences; essen- tially quasi-linear preferences; generalized Vickrey mechanism; maximal do- main. (search for similar items in EconPapers)
JEL-codes: D44 D61 D71 D82 (search for similar items in EconPapers)
Pages: 70
Date: 2026-06
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Persistent link: https://EconPapers.repec.org/RePEc:kue:epaper:e-21-008-v2

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