Welfare Bounds in a Growing Population

Abstract

We study the allocation of collectively owned indivisible goods when monetary transfers are possible. We restrict our attention to incentive compatible mechanisms which allocate the goods efficiently. Among these mechanisms, we characterize those that respect welfare lower bounds. The main characterization involves the identical-preferences lower-bound: each agent should be at least as well off as in an hypothetical economy where all agents have the same preference as hers, no agent envies another, and the budget is balanced. This welfare lower-bound grants agents equal rights/responsibilities over the jointly owned resources but insures agents against the heterogeneity in preferences. We also study the implications of imposing variable population axioms together with welfare bounds.collective ownership, allocation of indivisible goods and money, NIMBY problems, imposition of tasks, the Groves mechanisms, the identical-preferences lower-bound, individual rationality, the stand-alone lower-bound, k-fairness, population monotonicity