Ordinal Simplicity and Auditability in Discrete Mechanism Design

37 Pages Posted: 18 Nov 2023

See all articles by Marek Pycia

Marek Pycia

University of Zurich

M. Utku Ünver

Boston College - Department of Economics

Date Written: October 15, 2023


Designing mechanisms for environments without transfers, market designers usually restrict attention to ordinal mechanisms. Ordinal mechanisms are simpler for both designers and participants but miss potentially welfare-relevant information. Under what conditions focusing on ordinal mechanisms is without loss? We show that, in general, all group strategy-proof mechanisms are ordinal. All mechanisms maximizing an Arrovian social welfare function are ordinal; in a large class of environments, such Arrovian efficiency is implied by Pareto efficiency and a simple auditability condition. Strategy-proof mechanisms that are simple to audit are also ordinal. As applications, we characterize important classes of mechanisms in public choice as well as single-unit-demand and multiple-unit-demand allocation of private goods.

Keywords: Ordinality, simplicity, strategy-proofness, auditability, non-bossiness, Pareto efficiency, welfare maximization, Arrovian efficiency, rich domains, public choice, house allocation, single-unit demand, multi-unit demand

JEL Classification: C78, D78

Suggested Citation

Pycia, Marek and Ünver, M. Utku, Ordinal Simplicity and Auditability in Discrete Mechanism Design (October 15, 2023). Available at SSRN: https://ssrn.com/abstract=4609262 or http://dx.doi.org/10.2139/ssrn.4609262

Marek Pycia

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006

M. Utku Ünver (Contact Author)

Boston College - Department of Economics ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

HOME PAGE: http://sites.bc.edu/utku-unver

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