Collective Decision Through an Informed Designer

50 Pages Posted: 2 Mar 2021 Last revised: 11 Aug 2022

See all articles by Yunan Li

Yunan Li

City University of Hong Kong (CityU)

Xingtan Zhang

University of Colorado at Boulder - Department of Finance

Date Written: Aug 10, 2022

Abstract

A mechanism designer must make a decision on behalf of a group of agents, who are privately informed about their valuations attached to the decision. The designer is imperfectly informed about agents' private valuations. We give a necessary and sufficient condition on the designer's information under which the ex post efficient decision rule can be implemented by an ex ante budget-balanced, dominant strategy incentive compatible and ex post individually rational mechanism. Our results have many potential applications, such as governments' involvement in providing public goods and firms' organizational structure.

Keywords: Collective Decision; Provision of Public Goods, Asymmetric Information, Cross-Subsidization Mechanism, Public Finance

JEL Classification: C70, D82, G23, G38, H41

Suggested Citation

Li, Yunan and Zhang, Xingtan, Collective Decision Through an Informed Designer (Aug 10, 2022). Available at SSRN: https://ssrn.com/abstract=3761473 or http://dx.doi.org/10.2139/ssrn.3761473

Yunan Li

City University of Hong Kong (CityU) ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

Xingtan Zhang (Contact Author)

University of Colorado at Boulder - Department of Finance ( email )

Campus Box 419
Boulder, CO 80309
United States

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