Efficient compromising

A-Tier
Journal: Journal of Economic Theory
Year: 2009
Volume: 144
Issue: 5
Pages: 2057-2076

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Two agents must select one of three alternatives. Their ordinal rankings are commonly known and diametrically opposed. Efficiency requires choosing the alternative the agents rank second whenever the weighted sum of their von Neumann Morgenstern utilities is higher than under either agent's favorite alternative. The agents' utilities of the middle-ranked alternative are i.i.d., privately observed random variables. In our setup, which is closely related to a public goods problem where agents face liquidity constraints but no participation constraints, decision rules that truthfully elicit utilities and implement efficient decisions do not exist. We provide analytical and numerical results on second-best rules.

Technical Details

RePEc Handle
repec:eee:jetheo:v:144:y:2009:i:5:p:2057-2076
Journal Field
Theory
Author Count
2
Added to Database
2026-01-24