Strategy-proof Pareto-improvement

Samson Alva and Vikram Manjunath

Journal of Economic Theory, 2019, vol. 181, issue C, 121-142

Abstract: We consider a model where each agent has an outside option of privately known value. At a given allocation, we call the set of agents who do not exercise their outside options the “participants.” We show that one strategy-proof and individually rational mechanism weakly Pareto-improves another if and only if, at each preference profile, it weakly expands (in terms of set inclusion) the set of participants. Corollaries include: a sufficient condition for a mechanism to be on the Pareto-efficient frontier of strategy-proof mechanisms; uniqueness of strategy-proof Pareto-improvements under true preferences over certain normatively meaningful benchmark allocation rules; and a characterization of the pivotal mechanism.

Keywords: Strategy-proofness; Pareto-improvement; Pareto-constrained participation-maximality; School choice; Pivotal mechanism (search for similar items in EconPapers)
JEL-codes: C78 D47 D71 D82 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:181:y:2019:i:c:p:121-142

DOI: 10.1016/j.jet.2019.01.004

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