Abstract
We study the problem of allocating indivisible goods when monetary compensations are possible. First, we characterize the set of strategy-proof and envy-free mechanisms. Second, we identify the Pareto undominated subset in the set of strategy-proof and envy-free mechanisms. These characterizations can be interpreted as envy-free selections of Groves mechanisms.
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JEL Classification Numbers C72, D63, D71, D82
I would like to thank Jun Matsuyama, Hervé Moulin, Satoko Okuyama, Takehiko Yamato, Naoki Yoshihara, an associate editor, two anonymous referees, and seminar participants at Rice University and Tokyo Institute of Technology for helpful suggestions and detailed comments. Research was partially supported by Grant-in-Aid for Scientific Research 17730126 of the Ministry of Education, Culture, Sports, Science and Technology in Japan.
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Ohseto, S. Characterizations of strategy-proof and fair mechanisms for allocating indivisible goods. Economic Theory 29, 111–121 (2006). https://doi.org/10.1007/s00199-005-0014-1
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DOI: https://doi.org/10.1007/s00199-005-0014-1