Efficient incentives with social preferences

Thomas Daske and Christoph March

No 180, BERG Working Paper Series from Bamberg University, Bamberg Economic Research Group

Abstract: This study explores mechanism design with allocation-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 at least three agents: If endowments are sufficiently large, 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 (search for similar items in EconPapers)
JEL-codes: C72 C78 D62 D82 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-des, nep-mic and nep-upt
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https://www.econstor.eu/bitstream/10419/261339/1/1809134994.pdf (application/pdf)

Related works:
Journal Article: Efficient incentives with social preferences (2024)
Working Paper: Efficient Incentives with Social Preferences (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bamber:180

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