Optimal allocation without transfer payments

► In this paper, we find an optimal mechanism to allocate goods when the benevolent designer cannot charge agents. ► The designer can receive a costly but wasteful signal from them. ► We find cases in which ignoring these costly signals by giving agents equal share is optimal. ► In other cases, those that send the highest signal should receive the goods. ► However, we then show that there exist cases where more complicated mechanisms are superior.