Strategy-Proof Location on a Network, Journal of Economic Theory
We consider rules that choose a location on a graph (e.g. a road network) based on agents' single-peaked preferences. First, we characterize the class of strategy-proof, onto rules when the graph is a tree. Such a rule is based on a collection of generalized median voter rules (Moulin, 1980) satisfying a consistency condition. Second, we characterize such rules for graphs containing cycles. We show that while such a rule is not necessarily dictatorial, the existence of a cycle grants some agent an amount of decisive power, unlike the case of trees. Rules for this case can be described in terms of a subclass of such rules for trees.
James Schummer, Rakesh Vohra
Schummer, James, and Rakesh Vohra. 2002. Strategy-Proof Location on a Network. Journal of Economic Theory. 104(2): 405-428.LINK