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

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Author Info

  • Matthew O. Jackson

    (California Institute of Technology)

  • Antonio Nicolo

    (University of Padova)

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 EconWPA in its series Microeconomics with number 0211005.

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Date of creation: 04 Nov 2002
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Handle: RePEc:wpa:wuwpmi:0211005

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Keywords: Public Goods; Congestion; Club Goods; Strategy-Proof;

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Cited by:
  1. 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).
  2. Olivier Bochet & Sidartha Gordon, 2008. "Priorities in the Location of Multiple Public Facilities," Diskussionsschriften dp0902, Universitaet Bern, Departement Volkswirtschaft.
  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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