Non-dictatorial public distribution rules

This paper considers an exchange economy with no individual endowment where agents have classical quasi-linear preferences and the total available resources are to be distributed amongst a set of agents according to their reported preferences over the resources. We show that there is no social choice function (SCF) that is compatible with equal treatment of the equals, strategy-proofness and Pareto-efficiency. As a consequence, we explore an alternative notion of efficiency, the “Pareto-efficient in the range,” and observe that fairness and strategy-proofness are consistent with this notion of efficiency. A characterization of such SCFs for economies with two goods and two agents is established.