Strategy-proofness in private good economies with linear preferences: An impossibility result

Abstract

We consider the problem of allocating a social endowment of private goods among a group of n agents with linear preferences. We search for rules that satisfy three standard requirements. First is (Pareto-)efficiency. Second is the fairness requirement of “equal treatment of equals” (in welfare terms). Third is the incentive requirement of “strategy-proofness”: no agent should ever benefit from misrepresenting their preferences. We show that no such rule exists. A variety of domains have been explored and similar negative results have been proved but one would have hoped that the domain of linear preferences is sufficiently narrow to allow for some positive results. Our result dashes such hopes.