Efficiency in Collective DecisionMaking via Quadratic Transfers
Abstract
Consider the following collective choice problem: a group of budget constrained agents must choose one of several alternatives. Is there a budget balanced mechanism that: i) does not depend on the specific characteristics of the group, ii) does not require unaffordable transfers, and iii) implements utilitarianism if the agents' preferences are quasilinear and their private information? We study the following procedure: every agent can express any intensity of support or opposition to each alternative, by transferring to the rest of the agents wealth equal to the square of the intensity expressed; and the outcome is determined by the sums of the expressed intensities. We prove that as the group grows large, in every equilibrium of this quadratictransfers mechanism, each agent's transfer converges to zero, and the probability that the efficient outcome is chosen converges to one.
 Publication:

arXiv eprints
 Pub Date:
 January 2023
 DOI:
 10.48550/arXiv.2301.06206
 arXiv:
 arXiv:2301.06206
 Bibcode:
 2023arXiv230106206E
 Keywords:

 Economics  Theoretical Economics