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The B.E. Journal of Theoretical Economics

Editor-in-Chief: Schipper, Burkhard

Ed. by Fong, Yuk-fai / Peeters, Ronald / Puzzello , Daniela / Rivas, Javier / Wenzelburger, Jan


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1935-1704
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Efficient Combinatorial Allocations: Individual Rationality versus Stability

Hitoshi Matsushima
Published Online: 2018-01-04 | DOI: https://doi.org/10.1515/bejte-2017-0072

Abstract

We investigate combinatorial allocations with opt-out types and clarify the possibility of achieving efficiency under incomplete information. We introduce two distinct collective decision procedures. The first procedure assumes that the central planner designs a mechanism and players have the option to exit. The mechanism requires interim individual rationality. The second procedure assumes that players design a mechanism by committing themselves to participate. The mechanism requires marginal stability against blocking behavior by the largest proper coalitions. We show that the central planner can earn non-negative revenue in the first procedure, if and only if he cannot do so in the second.

Keywords: efficient combinatorial allocations; bayesian incentive compatibility; opt-out types; interim individual rationality; marginal stability

JEL Classification: D44; D61; D82

Notes

This study was supported by a grant-in-aid for scientific research (KAKENHI 25285059) from the Japan Society for the Promotion of Science (JSPS) and the Ministry of Education, Culture, Sports, Science and Technology (MEXT) of the Japanese government.

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About the article

Published Online: 2018-01-04


Citation Information: The B.E. Journal of Theoretical Economics, Volume 19, Issue 1, 20170072, ISSN (Online) 1935-1704, DOI: https://doi.org/10.1515/bejte-2017-0072.

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