STRATEGY-PROOF MECHANISMS WITH PRIVATE AND PUBLIC GOODS

In this paper we develop a differentiable approach to deal with incentives in a, possibly small, subset of a general domain of preferences in economies with one public and one private good. We show that, for two agents, there is no social rule which is efficient, nondictatorial and strategy-proof. For the case of more agents the same result occurs when nondictatorship is replaced by Individual Rationality or by Envy-Freeness. Journal of Economic Literature