Mechanism design for the environment

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Mechanism design for the environment

In: Handbook of Environmental Economics

Author Info

Baliga, Sandeep
Maskin, Eric

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Abstract

We argue that when externalities such as pollution are nonexcludable, agents must be compelled to participate in a "mechanism" to ensure a Pareto-efficient outcome. We survey some of the main findings of the mechanism-design (implementation-theory) literature -- such as the Nash implementation theorem, the Gibbard-Satterthwaite theorem, the Vickrey-Clarke-Groves mechanism, and the Arrow/d'Aspremont-Gerard-Varet mechanism -- and consider their implications for the environment, in particular the reduction of aggregate emissions of pollution. We consider the cases of both complete and incomplete information.

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This chapter was published in: K. G. Mäler & J. R. Vincent (ed.) Handbook of Environmental Economics, , chapter 07, pages 305-324, 2003.

This item is provided by Elsevier in its series Handbook of Environmental Economics with number 1-07.

Handle: RePEc:eee:envchp:1-07

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Related research
This chapter was published in the following book, which is listed on IDEAS:
K. G. Mäler & J. R. Vincent (ed.), 2003. "Handbook of Environmental Economics," Handbook of Environmental Economics, Elsevier, edition 1, volume 1, number 1, September. [Downloadable!] (restricted)
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Other versions of this item:

Paper
- Sandeep Baliga & Eric Maskin, 2002. "Mechanism Design for the Environment," Economics Working Papers 0024, Institute for Advanced Study, School of Social Science. [Downloadable!]
- Sandeep Baliga & Eric Maskin, 2003. "Mechanism Design for the Environment," Levine's Bibliography 506439000000000341, UCLA Department of Economics. [Downloadable!]

Find related papers by JEL classification:
Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Postlewaite, Andrew & Schmeidler, David, 1986. "Implementation in differential information economies," Journal of Economic Theory, Elsevier, vol. 39(1), pages 14-33, June. [Downloadable!] (restricted)
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. [Downloadable!] (restricted)
Dasgupta, Partha & Hammond, Peter & Maskin, Eric, 1980. "On Imperfect Information and Optimal Pollution Control," Review of Economic Studies, Blackwell Publishing, vol. 47(5), pages 857-60, October. [Downloadable!] (restricted)
Groves, Theodore, 1973. "Incentives in Teams," Econometrica, Econometric Society, vol. 41(4), pages 617-31, July. [Downloadable!] (restricted)
Maskin, Eric, 1999. "Nash Equilibrium and Welfare Optimality," Review of Economic Studies, Blackwell Publishing, vol. 66(1), pages 23-38, January. [Downloadable!] (restricted)
Other versions:
- Eric Maskin, 1998. "Nash Equilibrium and Welfare Optimality," Harvard Institute of Economic Research Working Papers 1829, Harvard - Institute of Economic Research.
Myerson, Roger B. & Satterthwaite, Mark A., 1983. "Efficient mechanisms for bilateral trading," Journal of Economic Theory, Elsevier, vol. 29(2), pages 265-281, April. [Downloadable!] (restricted)
Other versions:
- Roger B. Myerson & Mark A. Satterthwaite, 1981. "Efficient Mechanisms for Bilateral Trading," Discussion Papers 469S, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
Eric Maskin & Tomas Sjostrom, 2001. "Implementation Theory," Economics Working Papers 0006, Institute for Advanced Study, School of Social Science. [Downloadable!]
Other versions:
- Maskin, Eric & Sjostrom, Tomas, 2001. "Implementation Theory," Working Papers 5-01-1, Pennsylvania State University, Department of Economics. [Downloadable!]
- Maskin, Eric & Sjostrom, Tomas, 2002. "Implementation theory," Handbook of Social Choice and Welfare, in: K. J. Arrow & A. K. Sen & K. Suzumura (ed.), Handbook of Social Choice and Welfare, edition 1, volume 1, chapter 5, pages 237-288 Elsevier. [Downloadable!] (restricted)
E. Maskin, 1983. "The Theory of Implementation in Nash Equilibrium: A Survey," Working papers 333, Massachusetts Institute of Technology (MIT), Department of Economics.
Maskin, Eric S, 1994. "The Invisible Hand and Externalities," American Economic Review, American Economic Association, vol. 84(2), pages 333-37, May. [Downloadable!] (restricted)

Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Carlos Chávez & John Stranlund, 2009. "A Note on Emissions Taxes and Incomplete Information," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 44(1), pages 137-144, September. [Downloadable!] (restricted)
Eric S. Maskin, 2008. "Mechanism Design: How to Implement Social Goals," Economics Working Papers 0081, Institute for Advanced Study, School of Social Science. [Downloadable!]
Other versions:
- Maskin, Eric S., 2007. "Mechanism Design: How to Implement Social Goals," Nobel Prize in Economics documents 2007-4, Nobel Prize Committee. [Downloadable!]
- Eric S. Maskin, 2008. "Mechanism Design: How to Implement Social Goals," American Economic Review, American Economic Association, vol. 98(3), pages 567-76, June. [Downloadable!]

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