Abstract
An allocation mechanism is a function mapping agents’ preferences into allocations. Each agent’s preferences, however, are private to himself, so in reporting them he can misrepresent them if that achieves a more preferable allocation. A strategy-proof allocation mechanism eliminates incentives to misrepresent: each agent, no matter what his preferences are and no matter what preferences other agents report, maximizes by reporting his preferences truthfully. While the Gibbard-Satterthwaite theorem establishes that no useful strategy-proof allocation mechanisms exist in general, useful ones do exist for a number of specific, economically important classes of allocation problems.
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Satterthwaite, M.A. (2018). Strategy-Proof Allocation Mechanisms. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_1712
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DOI: https://doi.org/10.1057/978-1-349-95189-5_1712
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