We present an alternative proof of Fishburn’s (1975) axiomatization of lexicographic preferences. The essence of our proof lies in identifying “an extremely pivotal factor”. Our proof reconfirms the strong interconnections between Arrow’s and Gibbard–Satterthwaite’s theorems with...

In a sequencing problem with linear time cost, Suijs (1996) proved that it is possible to achieve first best. By first best we mean that one can find mechanisms that satisfy efficiency of decision, dominant strategy incentive compatibility and budget balancedness. In this paper we show that...

Why do political constituencies delegate decision power to representative assemblies? And how is the size of such assemblies determined? We analyze these questions of constitutional design in a model with voters learning their preferred alternative only after engaging in costly information...

In this paper we consider the problem of financing infrastructure when the regulator faces a budget constraint. The optimal budget-constrained mechanism satisfies four properties. The first property is bunching at the top, that is the more efficient firms produce the same quantity irrespective...

In this paper we consider the problem of financing infrastructure when the regulator faces a budget constraint. The optimal budget-constrained mechanism satisfies four properties. The first property is bunching at the top, that is the more efficient firms produce the same quantity. The second...

In mechanism design problems under incomplete information, it is generally difficult to find decision problems that are first best implementable. A decision problem under incomplete information is first best implementable if there exists a mechanism that extracts the private information and...

We analyse a (differentiated good) industry where an incumbent firm owns a network good (essential input) and faces potential competition in the (downstream) retail market. Unlike the traditional approach, we consider a scenario where the decision to compete or not in the downstream segment is...