Auctions with Ethical Concerns

We investigate the implementation of social choice rules (SCRs) in dominant strategy, where central planner evaluates welfare ethically rather than financially by excluding monetary transfers from evaluation, prohibiting redistribution, and putting heterogenous weights on agents’ willingness to pay a state-contingent manner. With such ethical concerns mind, we show that side-payment devices play significant role incentivizing agents be honest. Focusing multiunit auctions with single-unit demand, consider case which faces situation multiple conflicting criteria their own advantages coexist cannot aggregated into single criterion. demonstrate new rule design successfully implements reasonable SCRs induced method procedure explored Matsushima (2021). clarify when how use subsidies set-asides as incentive fairness devices, depending state.