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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Paper provided by EconWPA in its series Microeconomics with number
0211005.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Salvador Barbera, 1995.
"Strategy-Proof Allotment Rules,"
Discussion Papers
1142, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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