Time: 1:00pm Tuesday 28 May.
Location: SIT 402
Speaker: Haris Aziz, NICTA
Title: On the Tradeoff between Economic Efficiency and Strategyproofness in Randomized Social Choice
Abstract: Two fundamental notions in microeconomic theory are
efficiency—no agent can be made better off without making
another one worse off—and strategyproofness—no agent can
obtain a more preferred outcome by misrepresenting his preferences.
When social outcomes are probability distributions (or lotteries) over
alternatives, there are varying degrees of these notions depending on
how preferences over alternatives are extended to preference over
lotteries. We show that efficiency and strategyproofness are
incompatible to some extent when preferences are defined using
stochastic dominance (SD) and therefore introduce a natural weakening
of SD based on Savage’s sure-thing principle (ST). While random
serial dictatorship is SD-strategyproof, it only satisfies
ST-efficiency. Our main result is that strict maximal
lotteries—an appealing class of social decision schemes due to
Kreweras and Fishburn—satisfy SD-efficiency and
ST-strategyproofness. I then discuss other possible approaches to
reconcile efficiency and strategyproofness.