Welfare maximization entices participation

Florian Brandl, Felix Brandt and Johannes Hofbauer

Games and Economic Behavior, 2019, vol. 114, issue C, 308-314

Abstract: We consider randomized public good mechanisms with optional participation. Preferences over lotteries are modeled using skew-symmetric bilinear (SSB) utility functions, a generalization of classic von Neumann–Morgenstern utility functions. We show that every welfare-maximizing mechanism entices participation and that the converse holds under additional assumptions. As a corollary, we obtain a characterization of an attractive randomized voting rule that satisfies Condorcet-consistency and entices participation. This stands in contrast to Moulin's well-known no-show paradox (Moulin, 1988), which shows that no deterministic voting rule can satisfy both properties simultaneously.

Keywords: SSB utility; No show paradox; Maximal lotteries; Stochastic dominance (search for similar items in EconPapers)
JEL-codes: D6 D7 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:114:y:2019:i:c:p:308-314

DOI: 10.1016/j.geb.2019.02.008

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