DP16872 Arrovian Efficiency and Auditability in Discrete Mechanism Design

Author(s): Marek Pycia, M. Utku Ünver
Publication Date: January 2022
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Programme Areas: Organizational Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16872

We study mechanism design and preference aggregation in environments in which the space of social alternatives is discrete and the preference domain is rich, as in standard models of social choice and so-called allocation without transfers. We show that a mechanism (or aggregation rule) selects the best outcome with respect to some resolute Arrovian social welfare function if, and only if, it is Pareto efficient and auditable. We further show that auditability implies non-bossiness and is implied by the conjunction of non-bossiness and individual strategy-proofness, and that the later conjunction is equivalent to group strategy-proofness as well as to Maskin monotonicity. As applications, we derive new characterizations in voting and allocation domains.