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Choosing and sharing

  • Laurent-Lucchetti, Jérémy
  • Leroux, Justin

Implementing a project, like a nationwide nuclear waste disposal, which benefits all involved agents but brings major costs only to the host is often problematic. In practice, revelation issues and redistributional concerns are significant obstacles to achieving stable agreements. We address these issues by proposing the first mechanism to select the efficient site (the host with the lowest cost) while simultaneously allowing for the implementation of any individually rational division of the whole hosting cost. The subgame perfect Nash equilibria of our simple mechanism are efficient, budget-balanced and individually rational. Moreover, the truthful equilibrium is immune to coalitional deviations.

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Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 73 (2011)
Issue (Month): 1 (September)
Pages: 296-300

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Handle: RePEc:eee:gamebe:v:73:y:2011:i:1:p:296-300
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622836

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  1. Moulin, Herve, 2002. "Axiomatic cost and surplus sharing," Handbook of Social Choice and Welfare, in: K. J. Arrow & A. K. Sen & K. Suzumura (ed.), Handbook of Social Choice and Welfare, edition 1, volume 1, chapter 6, pages 289-357 Elsevier.
  2. Minehart, Deborah & Neeman, Zvika, 2002. "Effective Siting of Waste Treatment Facilities," Journal of Environmental Economics and Management, Elsevier, vol. 43(2), pages 303-324, March.
  3. Jérémy Laurent-Lucchetti & Justin Leroux, 2007. "Choosing and Sharing," Cahiers de recherche 07-13, HEC Montréal, Institut d'économie appliquée.
  4. Douglas Easterling, 1992. "Fair rules for siting a high-level nuclear waste repository," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 11(3), pages 442-475.
  5. Kunreuther, Howard & Kleindorfer, Paul R, 1986. "A Sealed-Bid Auction Mechanism for Siting Noxious Facilities," American Economic Review, American Economic Association, vol. 76(2), pages 295-99, May.
  6. O'Sullivan Arthur, 1993. "Voluntary Auctions for Noxious Facilities: Incentives to Participate and the Efficiency of Siting Decisions," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages S12-S26, July.
  7. Perry, Motty & Reny, Philip J., 1999. "A General Solution to King Solomon's Dilemma," Games and Economic Behavior, Elsevier, vol. 26(2), pages 279-285, January.
  8. Peleg, Bezalel, 1978. "Consistent Voting Systems," Econometrica, Econometric Society, vol. 46(1), pages 153-61, January.
  9. Jeremy Laurent-lucchetti & Justin Leroux, 2010. "Lindahl prices solve the NIMBY problem," Economics Bulletin, AccessEcon, vol. 30(3), pages 2457-2463.
  10. Laurent-Lucchetti, Jérémy & Leroux, Justin, 2009. "Axiomatic foundation for Lindahl pricing in the NIMBY context," MPRA Paper 14930, University Library of Munich, Germany.
  11. Lars Ehlers, 2009. "Choosing wisely: the natural multi-bidding mechanism," Economic Theory, Springer, vol. 39(3), pages 505-512, June.
  12. Eric Maskin, 1998. "Nash Equilibrium and Welfare Optimality," Harvard Institute of Economic Research Working Papers 1829, Harvard - Institute of Economic Research.
  13. Perez-Castrillo, David & Veszteg, Robert F., 2007. "Choosing a common project: Experimental evidence on the multibidding mechanism," Journal of Economic Behavior & Organization, Elsevier, vol. 63(3), pages 394-411, July.
  14. Hervé Moulin, 2010. "Auctioning or assigning an object: some remarkable VCG mechanisms," Social Choice and Welfare, Springer, vol. 34(2), pages 193-216, February.
  15. Mailath, George J & Postlewaite, Andrew, 1990. "Asymmetric Information Bargaining Problems with Many Agents," Review of Economic Studies, Wiley Blackwell, vol. 57(3), pages 351-67, July.
  16. David P�rez-Castrillo & David Wettstein, 2002. "Choosing Wisely: A Multibidding Approach," American Economic Review, American Economic Association, vol. 92(5), pages 1577-1587, December.
  17. Róbert F. Veszteg, 2004. "Multibidding Game under Uncertainty," Faculty Working Papers 14/04, School of Economics and Business Administration, University of Navarra.
  18. Matthew O. Jackson, 2001. "A crash course in implementation theory," Social Choice and Welfare, Springer, vol. 18(4), pages 655-708.
  19. Frey, Bruno S & Oberholzer-Gee, Felix & Eichenberger, Reiner, 1996. "The Old Lady Visits Your Backyard: A Tale of Morals and Markets," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1297-1313, December.
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