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The Strategy-Proof Provision of Public Goods Under Congestion and Crowding Preferences

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  • Jackson, 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

Paper provided by California Institute of Technology, Division of the Humanities and Social Sciences in its series Working Papers with number 1148.

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Date of creation: Nov 2002
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Publication status: Published: published in Journal of Economic Theory, 2004, V. 115, #2, pp. 278-308.
Handle: RePEc:clt:sswopa:1148

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Postal: Working Paper Assistant, Division of the Humanities and Social Sciences, 228-77, Caltech, Pasadena CA 91125
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  1. Barbera, Salvador & Bevia, Carmen, 2002. "Self-Selection Consistent Functions," Journal of Economic Theory, Elsevier, vol. 105(2), pages 263-277, August.
  2. Barbera, Salvador & Masso, Jordi & Neme, Alejandro, 1997. "Voting under Constraints," Journal of Economic Theory, Elsevier, vol. 76(2), pages 298-321, October.
  3. Moulin, Herve & Shenker, Scott, 1992. "Serial Cost Sharing," Econometrica, Econometric Society, vol. 60(5), pages 1009-37, September.
  4. Salvador Barberà, 2001. "An introduction to strategy-proof social choice functions," Social Choice and Welfare, Springer, vol. 18(4), pages 619-653.
  5. repec:fth:louvco:0111 is not listed on IDEAS
  6. 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.
  7. Salvador Barbera, 1995. "Strategy-Proof Allotment Rules," Discussion Papers 1142, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  8. Groves, Theodore, 1973. "Incentives in Teams," Econometrica, Econometric Society, vol. 41(4), pages 617-31, July.
  9. David Cantala, 2004. "Choosing the level of a public good when agents have an outside option," Social Choice and Welfare, Springer, vol. 22(3), pages 491-514, 06.
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  11. H. Moulin, 1980. "On strategy-proofness and single peakedness," Public Choice, Springer, vol. 35(4), pages 437-455, January.
  12. Anna Bogomolnaia & Antonio Nicolo, 2005. "Stable Assignment of Public Facilities under Congestion," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(1), pages 65-91, 02.
  13. 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.
  14. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185, October.
  15. Salvador Barbera & Matthew Jackson, 1991. "A Characterization of Strategy-Proof Social Choice Functions for Economies with Pure Public Goods," Discussion Papers 964, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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  17. Moulin, Herve, 1994. "Serial Cost-Sharing of Excludable Public Goods," Review of Economic Studies, Wiley Blackwell, vol. 61(2), pages 305-25, April.
  18. 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).
  19. Michel Le Breton & Shlomo Weber, 2001. "The Art of Making Everybody Happy," IMF Working Papers 01/176, International Monetary Fund.
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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. 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).
  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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