Dear all, I hope this post finds you well.
As you may know, the Participatory Economics (ParEcon) model proposes that the total income allocated to each workers’ council should be distributed among its members based on their individual effort.
However, ParEcon also suggests that such effort levels should be assessed by one’s co-workers. This raises a potential issue: if the total income is fixed and distributed through a peer-evaluation system, wouldn’t each worker have an incentive to rate others’ efforts as low as possible in order to make their own effort appear relatively higher?
To address this problem and encourage truthful evaluations, I would like to draw your attention to the paper “A Truth Serum for Sharing Rewards” by Carvalho and Larson. The authors develop a reward distribution mechanism based on peer assessment that not only aligns compensation with effort but also incentivizes honest reporting of others’ contributions (using Bayesian Truth Serum mechanism).
While the model in the paper relies on several strong assumptions, I believe it offers a promising starting point for further research into designing distribution mechanisms tailored to the principles of ParEcon.
