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Smooth Multibidding Mechanisms

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  • David Pérez-Castrillo
  • Nicolas Quérou

Abstract

We propose a smooth multibidding mechanism for environments where a group of agents have to choose one out of several projects. Our proposal is related to the multibidding mechanism (Pérez-Castrillo and Wettstein, 2002) but it is “smoother” in the sense that small variations in an agent’s bids do not lead to dramatic changes in the probability of selecting a project. This mechanism is shown to possess several interesting properties. First, the equilibrium outcome is unique. Second, it ensures an equal sharing of the surplus that it induces. Finally, it enables reaching an outcome as close to efficiency as is desired.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2011/wp-cesifo-2011-03/cesifo1_wp3394.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3394.

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Date of creation: 2011
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Handle: RePEc:ces:ceswps:_3394

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Keywords: mechanism design; NIMBY;

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