Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/105061
Authors: 
Nesterov, Alexander S.
Year of Publication: 
2014
Series/Report no.: 
WZB Discussion Paper SP II 2014-211
Abstract: 
This paper considers the problem of allocating N indivisible objects among N agents according to their preferences when transfers are not allowed, and studies the tradeoff between fairness and efficiency in the class of strategy-proof mechanisms. The main finding is that for strategy-proof mechanisms the following efficiency and fairness criteria are mutually incompatible: (1) Ex-post efficiency and envy-freeness, (2) ordinal efficiency and weak envy-freeness and (3) ordinal efficiency and equal division lower bound. Result (1) is the first impossibility result for this setting that uses ex-post efficiency; results (2) and (3) are more relevant for practical implementation than similar results in the literature. In addition, for N = 3 the paper strengthens the characterization result by Bogomolnaia and Moulin (2001): the random serial dictatorship mechanism is the unique strategy-proof, ex-post efficient mechanism that eliminates strict envy between agents with the same preferences.
Subjects: 
random assignment
random serial dictatorship
strategy-proofness
ex-post efficiency
weak envy-freeness
equal division lower bound
JEL: 
C78
D71
D78
Document Type: 
Working Paper

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