The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Strategy-Proof Allocation Mechanisms

  • Mark A. Satterthwaite
Reference work entry


An allocation mechanism is a function mapping agents’ preferences into allocations. Each agent’s preferences, however, are private to himself, so in reporting them he can misrepresent them if that achieves a more preferable allocation. A strategy-proof allocation mechanism eliminates incentives to misrepresent: each agent, no matter what his preferences are and no matter what preferences other agents report, maximizes by reporting his preferences truthfully. While the Gibbard-Satterthwaite theorem establishes that no useful strategy-proof allocation mechanisms exist in general, useful ones do exist for a number of specific, economically important classes of allocation problems.


Allocation mechanisms Arrow’s th Combinatorial auctions Dominant strategy Gibbard-Satterthwaite th Impossibility theorems Majority rule Median voter rule Misrepresentation of preferences Non-dictatorial allocation mechanisms Pareto optimal allocation mechanisms Single-peaked preferences Strategy-proof allocation mechanisms Voting by quota Dictatorial allocation mechanisms Vickrey-Clarke-Groves auction 

JEL Classifications

D5 C72 D71 D82 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Mark A. Satterthwaite
    • 1
  1. 1.