Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2013:43: Strategy-Proof Package Assignment

Albin Erlanson () and Karol Szwagrzak ()
Additional contact information
Albin Erlanson: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden
Karol Szwagrzak: Department of Economics, University of Southern Denmark, Postal: Campusvej 55, DK-5230, Odense M, Denmark

Abstract: We examine the strategy-proof allocation of multiple divisible and indivisible resources; an application is the assignment of packages of tasks, workloads, and compensations among the members of an organization. We find that any allocation mechanism obtained by maximizing a separably concave function over a polyhedral extension of the set of Pareto-efficient allocations is strategy-proof. Moreover, these are the only strategy-proof and unanimous mechanisms satisfying a coherence property and responding well to changes in the availability of resources. These mechanisms generalize the parametric rationing mechanisms (Peyton Young, 1987, Mathematics of Operations Research 12 (3), 397-414.), some of which date back to the Babylonian Talmud.

Keywords: Package assignment; Indivisible objects; Strategy-proofness

JEL-codes: C70; D47; D61; D63; D70

41 pages, December 13, 2013

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