Articles
A Method for Eliciting Utilities and its Application to Collective Choice
Theory and Decision, August 2006
Ilia Tsetlin
Designing a mechanism that provides a direct incentive for an individual to report his or her utility function over several alternatives is a difficult task. A framework for such mechanism design is the following: an individual (a decision maker) is faced with an optimization problem (e.g., maximization of expected utility), and a mechanism designer observes the decision maker's action. The mechanism reveals the individual's utility truthfully if the mechanism designer, having observed the decision maker's action, infers the decision maker's utility over several alternatives. This paper studies an example of such a mechanism and discusses its application to the problem of optimal social choice. Under certain simplifying assumptions about individuals' utility functions and about how voters choose their voting strategies, this mechanism selects the alternative that maximizes Harsanyi's social utility function and is Pareto-efficient.

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