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Choosing and sharing

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  • Laurent-Lucchetti, Jérémy
  • Leroux, Justin

Abstract

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.

Suggested Citation

  • Laurent-Lucchetti, Jérémy & Leroux, Justin, 2011. "Choosing and sharing," Games and Economic Behavior, Elsevier, vol. 73(1), pages 296-300, September.
  • Handle: RePEc:eee:gamebe:v:73:y:2011:i:1:p:296-300
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    References listed on IDEAS

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    1. Jackson, Matthew & Moulin, Hervé, 1992. "Implementing a public project and distributing its cost," Journal of Economic Theory, Elsevier, vol. 57(1), pages 125-140.
    2. Laurent-Lucchetti, Jérémy & Leroux, Justin, 2011. "Choosing and sharing," Games and Economic Behavior, Elsevier, vol. 73(1), pages 296-300, September.
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    19. Laurent-Lucchetti, Jérémy & Leroux, Justin, 2009. "Axiomatic foundation for Lindahl pricing in the NIMBY context," MPRA Paper 14930, University Library of Munich, Germany.
    20. Jeremy Laurent-lucchetti & Justin Leroux, 2010. "Lindahl prices solve the NIMBY problem," Economics Bulletin, AccessEcon, vol. 30(3), pages 2457-2463.
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    Cited by:

    1. Stefan Ambec & Yann Kervinio, 2016. "Cooperative decision-making for the provision of a locally undesirable facility," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 46(1), pages 119-155, January.
    2. Roberta Occhilupo & Giuliana Palumbo & Paolo Sestito, 2011. "Siting public facilities: a theoretical and empirical analysis of the Nimby syndrome in Italy," Questioni di Economia e Finanza (Occasional Papers) 91, Bank of Italy, Economic Research and International Relations Area.
    3. Laurent-Lucchetti, Jérémy & Leroux, Justin, 2011. "Choosing and sharing," Games and Economic Behavior, Elsevier, vol. 73(1), pages 296-300, September.
    4. Duygu Yengin, 2013. "Identical Preferences Lower Bound for Allocation of Heterogenous Tasks and NIMBY Problems," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 15(4), pages 580-601, August.
    5. Ghidoni, Riccardo, 2017. "Mistrust and Opposition to Large-Scale Projects : An Experiment on the Role of Uncertainty," Discussion Paper 2017-053, Tilburg University, Center for Economic Research.
    6. Pérez-Castrillo, David & Quérou, Nicolas, 2012. "Smooth multibidding mechanisms," Games and Economic Behavior, Elsevier, vol. 76(2), pages 420-438.
    7. Laurent-Lucchetti, Jérémy & Leroux, Justin, 2009. "Axiomatic foundation for Lindahl pricing in the NIMBY context," MPRA Paper 14930, University Library of Munich, Germany.
    8. Jeremy Laurent-lucchetti & Justin Leroux, 2010. "Lindahl prices solve the NIMBY problem," Economics Bulletin, AccessEcon, vol. 30(3), pages 2457-2463.

    More about this item

    Keywords

    Public goods Local externalities NIMBY Implementation Mechanism design VCG mechanisms Divide and choose;

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

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