Social choice with transfers

TL;DR

This paper investigates social choice problems involving transfers, establishing that the Shapley value uniquely satisfies certain desirable properties in such settings.

Contribution

It demonstrates that the Shapley value of the stand-alone game is the unique solution meeting key criteria in transfer-based social choice.

Findings

Shapley value uniquely satisfies desirable properties in transfer-based social choice.

Applicable to public goods, resource management, debt settlement, and division of goods.

Provides a theoretical foundation for transfer-based social choice mechanisms.

Abstract

We consider the problem of social choice when transfers between agents are possible. This includes several canonical applications: public-good provision, management of a common resource, settlement of debts, and division of goods. The question of interest is, given a set of possible alternatives, which should be chosen and what transfers, if any, should be made? We show that the Shapley value of the stand-alone game is the only solution to satisfy certain desirable properties.