BibTeX
@MISC{Thomson06forresource,
author = {William Thomson and William Thomson},
title = {for resource allocation},
year = {2006}
}
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Abstract
We identify previously unnoticed ways in which agents can strategically distort allocation rules, by affecting the set of “active ” agents. (i) An agent withdraws with his endowment. (ii) He gives control of his endowment to someone else and withdraws. (iii) He invites someone in and let him use some of his endowment. (iv) He pre-delivers to some other agent the net trade that the rule would assign to that second agent if that second agent had participated. In (i) and (ii), he and his co-conspirator may end up controlling resources that allow them to reach higher welfare levels than they otherwise would. In (iii) and (iv), he may end up with a bundle that he prefers to the one he would have been assigned had he not engaged in the manipulation. We show that (i) the Walrasian rule is not “withdrawing-proof”, nor “endowments-merging–proof, nor “endowments-splitting–proof”, but that it is “pre-delivery–proof”, and that (ii) canonical selections from the egalitarian-equivalence-in-trades solutions satisfy none of the properties. Key-words: resource allocation rules; withdrawal-proofness; endowmentsmerging–proofness; endowments-splitting–proofness; pre-delivery–proofness. I thank Murat Atlamaz, Diego Dominguez, Biung-Ghi Ju, and Tarık Kara for helpful discussions, and two referees and the Associate Editor for their suggestions. An early version
Keyphrases
resource allocation second agent unnoticed way resource allocation rule diego dominguez early version helpful discussion biung-ghi ju endowments-splitting proofness pre-delivery proofness walrasian rule endowments-splitting proof associate editor tar kara net trade canonical selection allocation rule murat atlamaz agent withdraws endowments-merging proof pre-delivery proof active agent egalitarian-equivalence-in-trades solution welfare level
