459. Truthful Implementation and Preference Aggregation in Restricted Domains

Juan Carlos Carbajal, Andrew McLennan & Rabee Tourky, School of Economics Discussion Paper No. 459 April 2012, School of Economics, The University of Queensland. Australia.

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Abstract

In a setting where agents have quasi-linear utilities over social alter- natives and a transferable commodity, we consider three properties that a social choice function may possess: truthful implementation (in dominant strategies); monotonicity in differences; lexicographic affine maximization. We introduce the notion of a flexible domain of preferences that allows elevation of pairs and study which of these conditions implies which others when the domain is flexible. We provide a generalization of the theorem of Roberts (1979) in restricted valuation domains. Flexibility holds (and the theorem is not vacuous) if the domain of valuation profiles is restricted to the space of continuous functions defined on a topological space, or the space of piecewise linear functions defined on an affine space, or the space of smooth functions defined on a compact differentiable man- ifold. Our results can be applied in both public and private goods allocation settings, with finite or infinite alternative sets.