Efficient incentives with social preferences

Thomas Daske () and Christoph March
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Thomas Daske: Department of Economics and Policy, Technical University of Munich

Theoretical Economics, 2024, vol. 19, issue 3

Abstract: We explore mechanism design with outcome-based social preferences. Agents' social preferences and private payoffs are all subject to asymmetric information. We assume quasi-linear utility and independent types. We show how the asymmetry of information about agents' social preferences can be operationalized to satisfy agents' participation constraints. Our main result is a possibility result for groups of \textit{at least three} agents: Any such group can resolve any given allocation problem with an ex-post budget-balanced mechanism that is Bayesian incentive-compatible, interim individually rational, and ex-post Pareto-efficient.

Keywords: Mechanism design; social preferences; Bayesian implementation; participation constraints; participation stimulation; money pump (search for similar items in EconPapers)
JEL-codes: C72 C78 D62 D82 (search for similar items in EconPapers)
Date: 2024-07-24
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Related works:
Working Paper: Efficient Incentives with Social Preferences (2022)
Working Paper: Efficient incentives with social preferences (2022)
Working Paper: Efficient Incentives with Social Preferences (2022)
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