Strategy-proofness versus efficiency in exchange economies: General domain properties and applications

We identify general domain properties that induce the non-existence of efficient, strategy-proof, and non-dictatorial rules in the 2-agent exchange economy. Applying these properties, we establish impossibility results in several restricted domains; for example, the intertemporal exchange problem (without saving technology) with preferences represented by the discounted sum of a temporal utility function, the "risk sharing problem" with risk averse expected utility preferences, the CES-preference domain, etc. None of the earlier studies applies to these examples

Continuous selections from the Pareto correspondence and non-manipulability in exchange economies

In n-agent exchange economies, we show that all efficient and continuous rules are "diagonally dictatorial" over the restricted domain of linear preferences and, in the 2-good case, over the domain of homothetic preferences. The diagonal dictator receives the entire endowment whenever all agents have an identical preference. We show that (fully) dictatorial rules are the only rules satisfying, in addition, veto-proofness, the requirement that if truth-telling ever leads to the worst outcome for an agent, he should not be able to escape it, by rnisrepresenting his preference. The same conclusion holds replacing veto-proofness with stronger notions of non-manipulability, veto-proofness* (no one can escape from the worst outcome or switch to the best outcome), weak strategy-proofness (no one can increase his bundle), and strategy-proofness. We extend these results to any larger domain imposing non-bossiness (no one can affect others' bundles without affecting his own). (C) 2003 Elsevier B.V. All rights reserved

A characterization of strategy-proof voting rules for separable weak orderings

We consider the problem of choosing a subset of a finite set of indivisible objects (public projects, facilities, laws, etc.) studied by Barbera et al. (1991). Here we assume that agents' preferences are separable weak orderings. Given such a preference, objects are partitioned into three types, "goods", "bads", and "nulls". We focus on "voting rules", which rely only on this partition rather than the full information of preferences. We characterize voting rules satisfying strategy-proofness (no one can ever be better off by lying about his preference) and null-independence (the decision on each object should not be dependent on the preference of an agent for whom the object is a null). We also show that serially dictatorial rules are the only voting rules satisfying efficiency as well as the above two axioms. We show that the "separable domain" is the unique maximal domain over which each rule in the first characterization, satisfying a certain fairness property, is strategy-proof

On the equivalence between progressive taxation and inequality reduction

We establish the precise connections between progressive taxation and inequality reduction, in a setting where the level of tax revenue to be raised is endogenously fixed and tax schemes are balanced. We show that, in contrast with the traditional literature on taxation, the equivalence between inequality reduction and the combination of progressivity and income order preservation does not always hold in this setting. However, we show that, among rules satisfying consistency and, either revenue continuity, or revenue monotonicity, the equivalence remains intact.progressivity, inequality reduction, income order preservation, consistency, taxation

Progressive and merging-proof taxation

We investigate the implications and logical relations between progressivity (a principle of distributive justice) and merging-proofness (a strategic principle) in taxation. By means of two characterization results, we show that these two principles are intimately related, despite their different nature. In particular, we show that, in the presence of continuity and consistency (a widely accepted framework for taxation) progressivity implies merging-proofness and that the converse implication holds if we add an additional strategic principle extending the scope of merging-proofness to a multilateral setting. By considering operators on the space of taxation rules, we also show that progressivity is slightly more robust than merging-proofness.taxation, progressivity, merging-proofness, consistency, operators.

Progressive and merging-proof taxation

We investigate the implications and logical relations between progressivity (a principle of distributive justice) and merging-proofness (a strategic principle) in taxation. By means of two characterization results, we show that these two principles are intimately related, despite their different nature. In particular, we show that, in the presence of continuity and consistency (a widely accepted framework for taxation) progressivity implies merging-proofness and that the converse implication holds if we add an additional strategic principle extending the scope of merging-proofness to a multilateral setting. By considering operators on the space of taxation rules, we also show that progressivity is slightly more robust than merging-proofness.taxation, progressivity, merging-proofness, consistency, operators

Entitlement theory of justice and end-state fairness in the allocation of goods

Robert Nozick allegedly introduced his liberal theory of private ownership as an objection to theories of end-state justice. Nevertheless, we show that, in a stylized framework for the allocation of goods in joint ventures, both approaches can be seen as complementary. More precisely, in such a context, self-ownership (the basis for Nozick’s entitlement theory of justice) followed by voluntary transfer (Nozick’s principle of just transfer) can lead to end-state fairness (as well as Pareto efficiency). Furthermore, under a certain solidarity condition, the only way to achieve end-state fairness, following Nozick’s procedure, is to endorse an egalitarian rule for the initial assignment of rights