Allocation without transfers: a welfare-maximizing mechanism under incomplete information

Ethem Akyol ()
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Ethem Akyol: TOBB University of Economics and Technology

Social Choice and Welfare, 2025, vol. 64, issue 3, No 8, 603-632

Abstract: Abstract This paper studies the allocation of multiple copies of indivisible objects to agents with multi-object demands in the absence of monetary transfers. We look for a welfare-maximizing ordinal mechanism in an incomplete information setting where agents’ preferences are privately known. Our main finding establishes the significant welfare gains of the so-called Ranking mechanism. When each agent’s type (values for objects) is independently drawn from an exchangeable distribution, the Ranking mechanism yields higher interim utility for all agents compared to any symmetric equilibrium of any other symmetric ordinal mechanism, regardless of the agents’ cardinal values.

Date: 2025
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DOI: 10.1007/s00355-024-01552-z

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