The strategy-proof provision of public goods under congestion and crowding preferences
AbstractWe 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 InfoArticle provided by Elsevier in its journal Journal of Economic Theory.
Volume (Year): 115 (2004)
Issue (Month): 2 (April)
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Web page: http://www.elsevier.com/locate/inca/622869
Other versions of this item:
- Matthew O. Jackson & Antonio Nicolo, 2002. "The Strategy-Proof Provision of Public Goods under Congestion and Crowding Preferences," Microeconomics 0211005, EconWPA.
- Jackson, Matthew O. & Nicolo, Antonio, 2002. "The Strategy-Proof Provision of Public Goods Under Congestion and Crowding Preferences," Working Papers 1148, California Institute of Technology, Division of the Humanities and Social Sciences.
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
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