Universität zu Köln

Bierbrauer, Felix ORCID: 0000-0003-3879-9607, Ockenfels, Axel ORCID: 0000-0003-1456-0191, Pollak, Andreas and Rueckert, Desiree (2017). Robust mechanism design and social preferences. J. Public Econ., 149. S. 59 - 81. LAUSANNE: ELSEVIER SCIENCE SA. ISSN 0047-2727

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Abstract

We study two classic challenges in mechanism design - bilateral trade a la Myerson and Satterthwaite (1983) and redistributive income taxation a la Mirrlees (1971) and Piketty (1993) - to show that some standard mechanism design solutions systematically fail with social preferences. We therefore introduce the notion of a social-preference-robust mechanism which works not only for selfish but also for social preferences of different nature and intensity, and characterize the optimal mechanism for this class. With the help of a series of laboratory experiments we find that behavior can indeed be better controlled with social-preference-robust mechanisms. (C) 2017 Elsevier B.V. All rights reserved.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Bierbrauer, Felix UNSPECIFIED orcid.org/0000-0003-3879-9607 UNSPECIFIED Ockenfels, Axel UNSPECIFIED orcid.org/0000-0003-1456-0191 UNSPECIFIED Pollak, Andreas UNSPECIFIED UNSPECIFIED UNSPECIFIED Rueckert, Desiree UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-232438
DOI:	10.1016/j.jpubeco.2017.03.003
Journal or Publication Title:	J. Public Econ.
Volume:	149
Page Range:	S. 59 - 81
Date:	2017
Publisher:	ELSEVIER SCIENCE SA
Place of Publication:	LAUSANNE
ISSN:	0047-2727
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Faculty of Management, Economics and Social Sciences > Economics > Macroeconomic, Financial and Economic Policy > Professur für Economics, Design and Behavior Center of Excellence C-SEB
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language GAME-THEORY; RECIPROCITY; COMPETITION; ECONOMICS; FAIRNESS Multiple languages Economics Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/23243