Equilibrium Participation in Public Goods Allocations
AbstractAn alternative notion of individual rationality for mechanism design is studied in which mechanisms suggest public goods allocations and individuals then choose whether or not to submit their requested transfer to the central planner. The set of allocations such that unanimous participation is a Nash equilibrium is shown to be sub-optimal in a wide variety of environments and shrinks to the endowment as the economy is replicated. Therefore, any non-trivial mechanism suffers from non-participation in the selected outcome when agents cannot be coerced to contribute.
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Bibliographic InfoPaper provided by Carnegie Mellon University, Tepper School of Business in its series GSIA Working Papers with number 2006-E7.
Date of creation: Nov 2005
Date of revision:
Contact details of provider:
Postal: Tepper School of Business, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, PA 15213-3890
Web page: http://www.tepper.cmu.edu/
Other versions of this item:
- Paul Healy, 2010. "Equilibrium participation in public goods allocations," Review of Economic Design, Springer, vol. 14(1), pages 27-50, March.
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
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