Local incentive compatibility with transfers

Debasis Mishra, Anup Pramanik () and Souvik Roy

Games and Economic Behavior, 2016, vol. 100, issue C, 149-165

Abstract: We consider locally incentive compatible mechanisms with deterministic allocation rules and transfers with quasilinear utility. We identify a rich class of type spaces, which includes the single peaked type space, where local incentive compatibility does not imply incentive compatibility. Our main result shows that in such type spaces, a mechanism is locally incentive compatible and payment-only incentive compatible if and only if it is incentive compatible. Payment-only incentive compatibility requires that a mechanism that generates the same allocation at two types must have the same payment at those two types. Our result works on a class of ordinal type spaces, which are generated by considering a set of ordinal preferences over alternatives and then considering all non-negative type vectors representing such preferences.

Keywords: Local incentive compatibility; Payment-only incentive compatibility; Single peaked type space; Ordinal type space (search for similar items in EconPapers)
JEL-codes: D44 D47 D82 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:100:y:2016:i:c:p:149-165

DOI: 10.1016/j.geb.2016.09.009

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