Falsification-proof non-market allocation mechanisms
Relying on manipulable characteristics to target the allocation of resources is fraught with difficulties. Naively optimal rules lead to falsification and allocative inefficiency. Optimizing the rule for allocative efficiency while accounting for falsification typically induces falsification, at a heavy cost to the agents. Moreover, falsification generates negative externalities. We characterize optimal falsification-proof rules under a broad range of falsification technologies....
Relying on manipulable characteristics to target the allocation of resources is fraught with difficulties. Naively optimal rules lead to falsification and allocative inefficiency. Optimizing the rule for allocative efficiency while accounting for falsification typically induces falsification, at a heavy cost to the agents. Moreover, falsification generates negative externalities. We characterize optimal falsification-proof rules under a broad range of falsification technologies....