Collective Decision Through an Informed Designer
50 Pages Posted: 2 Mar 2021 Last revised: 11 Aug 2022
Date Written: Aug 10, 2022
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: Suggested Citation