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Randomization under ambiguity: Efficiency and incentive compatibility
Journal article   Peer reviewed

Randomization under ambiguity: Efficiency and incentive compatibility

Zhiwei Liu, Xinxi Song and Nicholas C. Yannelis
Journal of mathematical economics, Vol.90, pp.1-11
10/01/2020
DOI: 10.1016/j.jmateco.2020.05.004

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Abstract

We generalize de Castro and Yannelis (2018) by taking into account the use of randomization. We answer the following questions: Is each efficient allocation of de Castro and Yannelis (2018) still Pareto optimal? Are all efficient allocations still incentive compatible under the Wald’s maxmin preferences? We provide positive answers and give applications.
Efficiency Incentive compatibility Lottery allocations Mixed strategy Wald’s maxmin preferences

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