Strategy-proof Budgeting via a VCG-like Mechanism
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We present a strategy-proof public goods budgeting mechanism where agents determine both the total volume of expanses and the specific allocation. It is constructed as a modification of VCG to a less typical environment, namely where we do not assume quasi-linear utilities nor direct revelation. We further show that under plausible assumptions it satisfies strategy-proofness in strictly dominant strategies, and consequently implements the social optimum as a Coalition Proof Nash Equilibrium. A primary (albeit not an exclusive) motivation of our model is Participatory Budgeting, where members of a community collectively decide the spending policy of public tax dollars. While incentives alignment in our mechanism, as in classic VCG, is achieved via individual payments we charge from agents, in a PB context that seems unreasonable. Our second main result thus provides that, under further specifications relevant in that context, these payments will vanish in large populations. In the last section we expand the mechanism's definition to a class of mechanisms in which the designer can prioritize certain outcomes she sees as desirable. In particular we give the example of favoring equitable (egalitarian) allocations.
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