Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
We study two classic challenges in mechanism design – bilateral trade à la Myerson and Satterthwaite (1983) and redistributive income taxation à la Mirrlees (1971) and Piketty (1993) – to show that some standard mechanism design solutions systematically fail with social preferences. We therefore introduce the notion of a social-preference-robust mechanism which works not only for selfish but also for social preferences of different nature and intensity, and characterize the optimal mechanism for this class. With the help of a series of laboratory experiments we find that behavior can indeed be better controlled with social-preference-robust mechanisms.