Equilibrium Selection and Stability for the Groves Ledyard Mechanism
AbstractIn their seminal paper Groves and Ledyard (1976) construct a balanced incentive compatible mechanism that solves the free rider problem. In subsequent research, Bergstrom, Simon, and Titus (1983) prove that there exist numerous asymmetric equilibria in addition to the symmetric equilibrium. In the present paper, we explicitly solve for the additional equilibria and use computational experiments to examine the structure and stability of the set of equilibria of the Groves Ledyard Mechanism. We find that all of the equilibria found by Berstrom, Simon, and Titus are unstable and that for a high level of the punishment parameter these equilibria do not exist. Further, we find that there exists an additional boundary equilibrium for each of the equilibria found by Bergstrom, Simon, and Titus. The boundary equilibria are all stable. Copyright 2004 Blackwell Publishing Inc..
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.
Volume (Year): 6 (2004)
Issue (Month): 2 (05)
Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=1097-3923
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Page, Scott E. & Tassier, Troy, 2010. "A characterization of equilibria in the Groves-Ledyard mechanism," Journal of Mathematical Economics, Elsevier, vol. 46(6), pages 1229-1242, November.
- Healy, Paul J. & Mathevet, Laurent, 2012. "Designing stable mechanisms for economic environments," Theoretical Economics, Econometric Society, vol. 7(3), September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.