DP3303 On Robust Constitution Design

Author(s): Emmanuelle Auriol , Robert J. Gary-Bobo

Publication Date: April 2002

Keyword(s): collective choice , incomplete information , mechanism design , representative democracy

JEL(s): D70 , D80 , H00

Programme Areas: Public Policy

Link to this Page: www.cepr.org/pubs/dps/DP3303.asp

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.