Bloch, Francis and Olckers, Matthew

Friend-based ranking - American Economic Journal: Microeconomics - 14(2), May, 2022: p.176-214

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. – Reproduced