We consider a decentralized firm with one selling division and one buying division with asymmetric information about the cost functions of the two divisions. We show that there is a mechanism which achieves efficiency, truth-telling via dominant strategies, individual rationality, and achieves...

Social optimization problems typically maximize the sum of individual weighted utilities over feasible allocations that satisfy certain constraints. While social optimization problems are at the heart of economic analysis, it is not always clear how to choose individual welfare weights. In this...