Local incentive compatibility with transfers

Debasis Mishra, Anup Pramanik () and Souvik Roy ()
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Souvik Roy: Indian Statistical Institute, Kolkata

Discussion Papers from Indian Statistical Institute, Delhi

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)
Pages: 34 pages
Date: 2016-01
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Citations: View citations in EconPapers (5)

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