Scandinavian Working Papers in Economics

Discussion Papers on Economics,
University of Southern Denmark, Department of Economics

No 5/2014: Strategy-proof package assignment

Albin Erlanson () and Karol Szwagrzak ()
Additional contact information
Albin Erlanson: Department of Economics, Postal: Lund University, Box 7082, SE-220 07 Lund, Sweden
Karol Szwagrzak: Department of Business and Economics, Postal: University of Southern Denmark, 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 (Young, 1987), some of which date back to the Babylonian Talmud.

Keywords: Package assignment; Indivisible objects; Strategy-proofness

JEL-codes: D47; D61; D63; D70

40 pages, March 7, 2014

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