In exchange economies where agents have private information about their preferences, strategy-proof and individually rational social choice functions are in general not efficient.We provide a restricted domain, namely the set of preferences representable by Leontief utility functions, where there exist mechanisms which are strategy-proof, efficient and individually rational. In two-agent, two-good economies we are able to provide an even stronger result.We characterize the class of efficient and individually rational social choice functions, which are fully implementable in truthful strategies.
Efficiency and Truthfulness with Leontief Preferences. A Note on Two-agent Two-good Economies
NICOLO', ANTONIO
2004
Abstract
In exchange economies where agents have private information about their preferences, strategy-proof and individually rational social choice functions are in general not efficient.We provide a restricted domain, namely the set of preferences representable by Leontief utility functions, where there exist mechanisms which are strategy-proof, efficient and individually rational. In two-agent, two-good economies we are able to provide an even stronger result.We characterize the class of efficient and individually rational social choice functions, which are fully implementable in truthful strategies.
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