Secure Implementation in Allotment Economies

O.L.A. Bochet, T. Sakai

Research output: Contribution to journalArticleAcademicpeer-review

7 Citations (Scopus)

Abstract

An allocation rule is securely implementable if it is strategy-proof and has no "bad" Nash equilibrium in its associated direct revelation game [Saijo, T., Sjostrom, T., Yamato, T., 2007. Secure implementation. Theoretical Econ. 2, 203-229. Original work published in RIETI Discussion Paper (03-E-019), 2003]. We study this implementability notion in allotment economies with single-peaked preferences [Sprumont, Y., 1991. The division problem with single-peaked preferences: A characterization of the uniform allocation rule. Econometrica 59, 509-519]. The equal division rule and priority rules are characterized on the basis of secure implementability, which underlines a strong trade-off between efficiency and symmetry. Though the uniform rule is not securely implementable, we show that, in its direct revelation game, any "bad" Nash equilibrium is blocked by a credible coalitional deviation, and any "good" Nash equilibrium is never blocked. Thus the impossibility of securely implementing the uniform rule can be resolved by allowing pre-play communication among players.

Original languageEnglish
Pages (from-to)35-49
Number of pages15
JournalGames and Economic Behavior
Volume68
Issue number1
DOIs
Publication statusPublished - 1 Jan 2010

Keywords

  • Secure implementation
  • Strategy-proofness
  • Uniform rule
  • Priority rule
  • Nash implementation
  • Coalition-proof Nash equilibrium
  • Single-peaked preference
  • Fair allocation
  • PROOF NASH EQUILIBRIA
  • COALITION-PROOFNESS
  • FAIR DIVISION
  • PREFERENCES
  • ALLOCATION

Cite this