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Friend-Based Ranking

  • Francis Bloch
  • Matthew Olckers
American Economic Journal: Microeconomics
vol. 14, no. 2, May 2022
(pp. 176-214)
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Abstract

We analyze the design of a mechanism to extract a ranking of individuals according to a unidimensional characteristic, such as ability or need. Individuals, connected on a social network, only have local information about the ranking. We show that a planner can construct an ex post incentive compatible and efficient mechanism if and only if every pair of friends has a friend in common. We characterize the windmill network as the sparsest social network for which the planner can always construct a complete ranking.

Citation

Bloch, Francis, and Matthew Olckers. 2022. "Friend-Based Ranking." American Economic Journal: Microeconomics, 14 (2): 176-214. DOI: 10.1257/mic.20190333

Additional Materials

JEL Classification

  • D11 Consumer Economics: Theory
  • D82 Asymmetric and Private Information; Mechanism Design
  • D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
  • D85 Network Formation and Analysis: Theory
  • O12 Microeconomic Analyses of Economic Development
  • Z13 Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
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