Budget-Balance, Fairness and Minimal Manipulability

Tommy Andersson, Lars Ehlers and Lars-Gunnar Svensson

Cahiers de recherche from Centre interuniversitaire de recherche en économie quantitative, CIREQ

Abstract: A common real-life problem is to fairly allocate a number of indivisible objects and a fixed amount of money among a group of agents. Fairness requires that each agent weakly prefers his consumption bundle to any other agent’s bundle. Under fairness, efficiency is equivalent to budget-balance (all the available money is allocated among the agents). Budget-balance and fairness in general are incompatible with non-manipulability (Green and Laffont, 1979). We propose a new notion of the degree of manipulability which can be used to compare the ease of manipulation in allocation mechanisms. Our measure counts for each problem the number of agents who can manipulate the rule. Given this notion, the main result demonstrates that maximally linked fair allocation rules are the minimally manipulable rules among all budget-balanced and fair allocation mechanisms. Such rules link any agent to the bundle of a pre-selected agent through indifferences (which can be viewed as indirect egalitarian equivalence).

Keywords: minimal manipulability; fairness; budget-balance; allocation rules (search for similar items in EconPapers)
JEL-codes: C71 C78 D63 D71 D78 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2010
New Economics Papers: this item is included in nep-gth
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Citations: View citations in EconPapers (13)

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Related works:
Journal Article: Budget-balance, fairness and minimal manipulability (2014)
Working Paper: Budget-Balance, Fairness and Minimal Manipulability (2013)
Working Paper: Budget-Balance, Fairness and Minimal Manipulability (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:mtl:montec:18-2010

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