MICRO/THEORY: (Strong) Implementability with Transfer; Dr Jianrong Tian (Peking University)

Abstract

We fully characterise (strong) implementability with transfer and without invoking quasilinearity, via a novel cyclical monotonicity condition that extends Rochet (1987). We then apply it to crack the problem of implementing monotone allocations for the general case under the assumption of the possibility of compensation: (i) the single-crossing condition, when type space is totally ordered and outcome space is partially ordered, is sufficient and necessary for strongly implementing all monotone allocation; and (ii) with the strict single-crossing condition and totally ordered type space and outcome space, an allocation is implementable if and only if it is monotone. No additional structure or regularity conditions are needed.

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