Influence in Private-Good Economies

Madhav Raghavan

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

Abstract: Many private-good allocation rules allow for certain agents - when they change the preferences they report to the rule - to affect the welfare of other agents without affecting their own welfare. Classic examples are the agent-proposing Gale-Shapley rule for matching (Gale and Shapley, 1962) and the Vickrey rule for single-object auctions (Vickrey, 1961). We propose a new methodology, based on the study of this influence that agents might have on each other's welfare, that furthers our understanding of such rules. Moreover, we use structural conditions on influence to explain why some rules satisfy normatively desirable properties such as Pareto-efficiency, stability, weak Maskin monotonicity, non-wastefulness, and weak group-strategy-proofness, while others do not. Illustrative applications include the efficiency-adjusted deferred acceptance mechanism for matching (Kesten, 2010), and generalised absorbing top-trading-cycles rules in object-allocation models (Aziz and Keijzer, 2011).

Keywords: Private-goods allocation; welfare; strategy-proofness; influence; matching; single-object auctions; object-allocation; non-bossiness; Pareto-efficiency; stability (search for similar items in EconPapers)
JEL-codes: C78 D71 (search for similar items in EconPapers)
Pages: 59 pp.
Date: 2018-07
New Economics Papers: this item is included in nep-des and nep-gth
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Persistent link: https://EconPapers.repec.org/RePEc:lau:crdeep:18.05

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