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Author(s)

Mark Satterthwaite

An allocation mechanism is a function mapping agents' reported preferences into allocations. Each agent's preferences, however, are private to himself, so in reporting them he can misrepresent them if that is advantageous in the sense of achieving a more preferable allocation. A strategy-proof allocation mechanism eliminates incentives to misrepresent: each agent, no matter what his preferences are and no matter what preferences other agents report, maximizes by reporting his preferences truthfully. While the Gibbard-Satterthwaite theorem establishes that no useful strategy-proof allocation mechanisms exist in general, they do exist for a number of specific, economically important classes of allocation problems.
Date Published: 2008
Citations: Satterthwaite, Mark. 2008. Strategy-Proof Allocation Mechanisms.