DP3303 | On Robust Constitution Design

Publication Date

20/04/2002

JEL Code(s)

Keyword(s)

Programme Area(s)

Abstract

We study a class of representation mechanisms, based on reports made by a random subset of agents, called representatives, in a collective choice problem with quasi-linear utilities. We do not assume the existence of a common prior probability describing the distribution of preference types. In addition, there is no benevolent planner. An individual who cannot be assumed impartial, a self-interested executive, will carry out decisions. These assumptions impose new constraints on Mechanism Design. A robust mechanism is defined as maximizing expected welfare under a vague prior probability distribution, and over a set of mechanisms which is at the same time immune from opportunistic manipulations by the executive, and compatible with truthful revelation of preferences by representatives. Robust mechanisms are characterized and their existence is shown. Sampling Groves mechanisms are shown to be robust.