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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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Cited by:
  1. Bochet, Olivier & Gordon, Sidartha, 2012. "Priorities in the location of multiple public facilities," Games and Economic Behavior, Elsevier, vol. 74(1), pages 52-67.
  2. 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.
  3. Jordi Massó & Antonio Nicolò, 2007. "Efficient and Stable Collective Choices under Gregarious Preferences," UFAE and IAE Working Papers 714.07, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).

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