Serial Dictatorship Mechanisms with Reservation Prices

Bettina Klaus () and Alexandru Nichifor

Cahiers de Recherches Economiques du Département d'économie from Université de Lausanne, Faculté des HEC, Département d’économie

Abstract: We propose a new set of mechanisms, which we call serial dictatorship mechanisms with reservation prices for the allocation of one indivisible good. We show that a mechanism satisfies minimal tradability, individual rationality, strategy-proofness, consistency, and non wasteful tie-breaking if and only if there exists a reservation price vector and a priority ordering such that the mechanism is a serial dictatorship mechanism with reservation prices. We obtain a second characterization by replacing individual rationality with non-imposition. In both our characterizations the reservation price vector, the priority ordering, and the mechanism are all found simultaneously and endogenously from the properties. In addition, we show that in our model a mechanism satisfies Pareto efficiency, strategy-proofness, and consistency if and only if it is welfare equivalent to a classical serial dictatorship. Finally, we illustrate how the normative requirements governing the functioning of some real life markets and the mechanisms that these markets use are reasonably well captured by our model and results.

Keywords: serial dictatorship; individual reservation prices; strategy-proofness; consistency (search for similar items in EconPapers)
JEL-codes: C78 D47 D71 (search for similar items in EconPapers)
Pages: 24 pp.
Date: 2017-05
New Economics Papers: this item is included in nep-gth and nep-mic
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Related works:
Journal Article: Serial dictatorship mechanisms with reservation prices (2020)
Working Paper: Serial Dictatorship Mechanisms with Reservation Prices (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:lau:crdeep:17.07

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