Abstract
We consider the design of decision rules in an environment with two alternatives, independent private values and no monetary transfers. The utilitarian rule subject to incentive compatibility constraints is a weighted majority rule, where agents' weights correspond to expected gains given that their favorite alternative is chosen. It is shown that a rule is interim incentive efficient if and only if it is a weighted majority rule, and we characterize those weighted majority rules that are ex ante incentive efficient. We also discuss efficiency in the class of anonymous mechanisms and the stability of weighted majority rules.
| Original language | English |
|---|---|
| Pages (from-to) | 1067-1088 |
| Number of pages | 22 |
| Journal | International Economic Review |
| Volume | 55 |
| Issue number | 4 |
| DOIs | |
| Publication status | Published - 2014 Nov 1 |
Bibliographical note
Publisher Copyright:© (2014) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
All Science Journal Classification (ASJC) codes
- Economics and Econometrics