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Public-Good Provision in a Large Economy

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  • Felix Bierbrauer

    ()
    (Max Planck Institute for Research on Collective Goods, Bonn)

  • Martin Hellwig

    ()
    (Max Planck Institute for Research on Collective Goods)

Abstract

We propose a new approach to the normative analysis of public-good provision in a large economy. Our analysis is based on a mechanism design approach that involves a requirement of coalition-proofness, as well as a requirement of robustness, so that the mechanism must not depend on specific assumptions about individual beliefs. Our main result shows that such a mechanism can condition only on the population shares of people with valuations above and below the per capita provision costs. This suggests an intriguing link between mechanism design for large economies and voting.

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Bibliographic Info

Paper provided by Max Planck Institute for Research on Collective Goods in its series Working Paper Series of the Max Planck Institute for Research on Collective Goods with number 2010_02.

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Date of creation: Jan 2010
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Handle: RePEc:mpg:wpaper:2010_02

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Keywords: Large Economy; Mechanism Design; Public-good provision;

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Cited by:
  1. Felix Bierbrauer & Martin Hellwig, 2011. "Mechanism Design and Voting for Public-Good Provision," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2011_31, Max Planck Institute for Research on Collective Goods.

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