Implementation by Sortition in Non Exclusive Information Economics

38 Pages Posted: 8 Sep 2015

See all articles by Rene Saran

Rene Saran

University of Cincinnati - Department of Economics

Norovsambuu Tumennasan

Dalhousie University

Date Written: July 14, 2015

Abstract

We study the Bayesian implementation problem in economies that are divided into groups consisting of two or more individuals with the same information. Our results cover problems like that of allocating public funds among states, regulating activities causing externalities among firms, locating public facilities in neighborhoods, electing candidates from multiple districts etc. Instead of the standard communication protocol of direct democracy whereby the planner consults all individuals, we analyze sortition schemes whereby the planner consults only a subset of the individuals, called senators, who are selected via some kleroterion (i.e., a lottery machine) p. In general environments, under mild “economic” assumptions on preferences, we show that every social choice function (SCF) that is implementable by direct democracy is also p-implementable if p always selects two or more individuals from each group and the selection process does not partition any group into “disconnected” subgroups (in the sense that individuals belonging to different subgroups are never selected together). In quasilinear environments satisfying a generic condition on individuals’ beliefs, every SCF can be implemented by a simple and economically meaningful mechanism in which the kleroterion selects a predesignated group leader and one other randomly chosen individual from each group.

Keywords: Bayesian implementation; Nonexclusive information; p-Implementation; Sortition

JEL Classification: C72; D02; D78; D82

Suggested Citation

Saran, Rene and Tumennasan, Norovsambuu, Implementation by Sortition in Non Exclusive Information Economics (July 14, 2015). Available at SSRN: https://ssrn.com/abstract=2656968 or http://dx.doi.org/10.2139/ssrn.2656968

Rene Saran (Contact Author)

University of Cincinnati - Department of Economics ( email )

Carl H. Lindner Hall 2925 Campus Green Drive
PO Box 0371
Cincinnati, OH 45221-0211
United States

Norovsambuu Tumennasan

Dalhousie University ( email )

6225 University Avenue
Halifax, Nova Scotia B3H 4H7
Canada

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