Power and Freedom in Mechanisms

Abstract

In a strategy-proof mechanism, the influence of an agent may be measured as the set of outcomes an agent can bring about by varying her (reported) type. More specifically, we refer to an agent's influence on her own relevant outcomes as her freedom, and to the influence on outcomes relevant for other agents as her power over others. The framework generalises both the notion of opportunity set from the freedom of choice literature, and established power indices for binary voting. It identifies constrained efficient mechanisms as those that maximise agents' freedom. Applying our framework to the analysis of assignment rules, we provide novel characterisations of the top trading cycles rule and bipolar serial dictatorships in terms of their freedom and power properties.

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