We study strategy-proof rules for choosing between two alternatives. We consider the full preference domain which allows for indifference. In this framework, for strategyproof rules, ontoness does not imply efficiency. We weaken the requirement of efficiency to ontoness and characterizes the class of strategy-proof rules. We argue that the notion of efficiency is not desirable always. Our main result provides a simple characterization of the class of onto, anonymous and strategy-proof rules in this framework. Our analysis can help policy makers choose among these rules.
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We consider locally incentive compatible mechanisms with deterministic allocation rules and transfers with quasilinear utility. We identify a rich class of type spaces, which includes the single peaked type space, where local incentive compatibility does not imply incentive compatibility. Our main result shows that in such type spaces, a mechanism is locally incentive compatible and payment-only incentive compatible if and only if it is incentive compatible. Payment-only incentive compatibility requires that a mechanism that generates the same allocation at two types must have the same payment at those two types. Our result works on a class of ordinal type spaces, which are generated by considering a set of ordinal preferences over alternatives and then considering all non-negative type vectors representing such preferences.JEL Codes: D82, D44, D47
We study strategy-proof rules for choosing between two alternatives. We consider the full preference domain which allows for indifference. In this framework, for strategyproof rules, ontoness does not imply efficiency. We weaken the requirement of efficiency to ontoness and characterizes the class of strategy-proof rules. We argue that the notion of efficiency is not desirable always. Our main result provides a simple characterization of the class of onto, anonymous and strategy-proof rules in this framework. Our analysis can help policy makers choose among these rules.
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