On mechanisms eliciting ordinal preferences

Abstract

When is a mechanism designer justified in only asking for ordinal information about preferences? Simple examples show that, even if the planner's goal (expressed by a social choice correspondence, or SCC) depends only on ordinal information, eliciting cardinal information may help with incentives. However, if agents may be uncertain about their own cardinal preferences, then a strong robustness re-quirement can justify the focus on ordinal mechanisms. Specifically, when agents' preferences over pure outcomes are strict, if a planner is able to implement an SCC (in ex-post equilibrium) using a mechanism that is robust to interdependence of arbitrary form in cardinal preferences, then there must exist such a mechanism that elicits only ordinal preferences. The strictness assumption can be dropped if we further allow the possibility of non-expected-utility preferences. Thanks to (in random order) Juuso Toikka, Alex Wolitzky, Muhamet Yildiz, Yuichiro Kamada, Bengt Holmström, and Daron Acemoglu, and especially to Parag Pathak, for helpful discussions and advice.