Abstract
We show that strategy-proof allocation mechanisms for economies with public goods are dictatorial—i.e., they always select an allocation in their range that maximizes the welfare of the same single individual (the dictator). Further, strategy-proof and efficient allocation mechanisms are strongly dictatorial—i.e., they select the dictator’s preferred allocation on the entire feasible set. Thus, our results reveal the extent to which the conflict between individual incentives and other properties that may be deemed desirable (e.g., fairness, equal treatment, distributive justice) pervades resource allocation problems.
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We gratefully acknowledge the comments and suggestions of the editor and referees. (In particular, we thank a referee who suggested a simple argument to deal with the case n > 2 in the proof by induction of Theorems 1 and 2.) We also thank Francisco Marhuenda and Carmelo Núñez for helpful discussion, and Carmen García-Miguel for helping us composing the figures. Financial support from the Spanish Ministry of Education, grants SEJ2007-67436 and Consolider-Ingenio 2010, and from the Comunidad de Madrid, grant Excelecon, is gratefully acknowledged.
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Moreno, D., Moscoso, M.J. Strategy-proof allocation mechanisms for economies with public goods. Econ Theory 52, 315–336 (2013). https://doi.org/10.1007/s00199-011-0627-5
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DOI: https://doi.org/10.1007/s00199-011-0627-5