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The strategy-proof provision of public goods under congestion and crowding preferences

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  • Jackson, M.O.Matthew O.
  • Nicolo, Antonio

Abstract

We examine the strategy-proof provision of excludable public goods when agents care not only about the level of provision of a public good, but also the number of consumers. We show that on such domains strategy- proof and efficient social choice functions satisfying an outsider independence condition must be rigid in that they must always assign a fixed number of consumers, regardless of individual desires to participate. The fixed number depends on the attitudes of agents regarding group size - being small when congestion effects dominate (individuals prefer to have fewer other consumers) and large when cost sharing effects dominate (agents prefer to have more consumers). A hierarchical rule selects which consumers participate and a variation of a generalized median rule to selects the level of the public good. Under heterogeneity in agents' views on the optimal number of consumers, strategy-proof, efficient, and outsider independent social choice functions are much more limited and in an important case must be dictatorial.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 115 (2004)
Issue (Month): 2 (April)
Pages: 278-308

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Handle: RePEc:eee:jetheo:v:115:y:2004:i:2:p:278-308

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Web page: http://www.elsevier.com/locate/inca/622869

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  1. Salvador Barberà, 2001. "An introduction to strategy-proof social choice functions," Social Choice and Welfare, Springer, vol. 18(4), pages 619-653.
  2. Green, Jerry & Laffont, Jean-Jacques, 1977. "Characterization of Satisfactory Mechanisms for the Revelation of Preferences for Public Goods," Econometrica, Econometric Society, vol. 45(2), pages 427-38, March.
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  6. Deb, Rajat & Razzolini, Laura, 1999. "Auction-Like Mechanisms for Pricing Excludable Public Goods," Journal of Economic Theory, Elsevier, vol. 88(2), pages 340-368, October.
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  13. LE BRETON, Michel & WEBER, Shlomo, 2001. "The art of making everybody happy: how to prevent a secession," CORE Discussion Papers 2001011, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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Cited by:
  1. BOCHET, Olivier & GORDON, Sidartha, 2008. "Priorities in the Location of Multiple Public Facilities," Cahiers de recherche 2008-07, Universite de Montreal, Departement de sciences economiques.
  2. Massó, Jordi & Nicolò, Antonio, 2008. "Efficient and stable collective choices under gregarious preferences," Games and Economic Behavior, Elsevier, vol. 64(2), pages 591-611, November.
  3. Fan-Chin Kung, 2010. "Coalition formation with local public goods and group-size effect," International Journal of Game Theory, Springer, vol. 39(4), pages 573-583, October.

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