Strategy-proof allocation mechanisms for economies with public goods

Abstract

We show that strategy-proof allocation mechanisms for economies with public goods are dictatorial -- i.e., they always select an allocation in their range that maximizes the welfare of the same single individual (the dictator). Further, strategy-proof and efficient allocation mechanisms are strongly dictatorial -- i.e., they select the dictator's preferred allocation on the entire feasible set. Thus, our results reveal the extent to which the conflict between individual incentives and other properties that may be deemed desirable (e.g., fairness, equal treatment, distributive justice) pervades resource allocation problems