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Gibbard-Satterthwaite Success Stories And Obvious Strategyproofness

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  • SOPHIE BADE
  • YANNAI A. GONCZAROWSKI
Abstract
The Gibbard-Satterthwaite Impossibility Theorem (Gibbard, 1973; Satterthwaite, 1975) holds that dictatorship is the only unanimous and strategyproof social choice function on the full domain of preferences. Much of the work in mechanism design aims at getting around this impossibility theorem. Three grand success stories stand out. On the domains of single peaked preferences, house matching, and of quasilinear preferences, there are appealing unanimous and strategyproof social choice functions. We investigate whether these success stories are robust to strengthening strategyproofness to obvious strategyproofness, recently introduced by Li (2015). A social choice function is obviously strategyproof implementable (OSP) implementable if even cognitively limited agents can recognize their strategies as weakly dominant. For single-peaked preferences, we characterize the class of OSP-implementable and unanimous social choice rules as dictatorships with safeguards against extremism — mechanisms (which turn out to also be Pareto optimal) in which the dictator can choose the outcome, but other agents may prevent the dictator from choosing an outcome which is too extreme. Median voting is consequently not OSP-implementable. Indeed the only OSP-implementable quantile rules either choose the minimal or the maximal ideal point. For house matching, we characterize the class of OSP-implementable and Pareto optimal matching rules as sequential barter with lurkers — a significant generalization over bossy variants of bipolar serially dictatorial rules. While Li (2015) shows that second-price auctions are OSP-implementable when only one good is sold, we show that this positive result does not extend to the case of multiple goods. Even when all agents’ preferences over goods are quasilinear and additive, no welfare-maximizing auction where losers pay nothing is OSP-implementable when more than one good is sold. Our analysis makes use of a gradual revelation principle, an analog of the (direct) revelation principle for OSP mechanisms that we present and prove.

Suggested Citation

  • Sophie Bade & Yannai A. Gonczarowski, 2016. "Gibbard-Satterthwaite Success Stories And Obvious Strategyproofness," Discussion Paper Series dp704, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
    • Handle: RePEc:huj:dispap:dp704
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    Cited by:

    1. Basteck, Christian, 2024. "An axiomatization of the random priority rule," Discussion Papers, Research Unit: Market Behavior SP II 2024-201, WZB Berlin Social Science Center.
    2. Shengwu Li, 2017. "Obviously Strategy-Proof Mechanisms," American Economic Review, American Economic Association, vol. 107(11), pages 3257-3287, November.
    3. Christian Basteck, 2024. "An Axiomatization of the Random Priority Rule," Rationality and Competition Discussion Paper Series 502, CRC TRR 190 Rationality and Competition.
    4. Maya Bar-Hillel & Cass R. Sunstein, 2019. "Baffling bathrooms: On navigability and choice architecture," Discussion Paper Series dp726, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
    5. Bade, Sophie, 2019. "Matching with single-peaked preferences," Journal of Economic Theory, Elsevier, vol. 180(C), pages 81-99.

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