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Public goods, participation constraints, and democracy: A possibility theorem


  • Grüner, Hans Peter
  • Koriyama, Yukio


It is well known that ex post efficient mechanisms for the provision of indivisible public goods are not interim individually rational. However, the corresponding literature assumes that agents who veto a mechanism can enforce a situation in which the public good is never provided. This paper instead considers majority voting with uniform cost-sharing as the relevant status quo. Efficient mechanisms may then exist, which also satisfy all agentsʼ interim participation constraints. In this case, ex post inefficient voting mechanisms can be replaced by efficient ones without reducing any individualʼs expected utility. Intuitively, agents with a low willingness to pay have to contribute more under majority rule than under an efficient mechanism with a balanced budget. Although this possibility theorem is not universal in the sense of Schweizer (2006), an asymptotic possibility is obtained for certain type distributions.

Suggested Citation

  • Grüner, Hans Peter & Koriyama, Yukio, 2012. "Public goods, participation constraints, and democracy: A possibility theorem," Games and Economic Behavior, Elsevier, vol. 75(1), pages 152-167.
  • Handle: RePEc:eee:gamebe:v:75:y:2012:i:1:p:152-167
    DOI: 10.1016/j.geb.2011.11.001

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    References listed on IDEAS

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    Cited by:

    1. Felix J. Bierbrauer & Pierre C. Boyer, 2016. "Efficiency, Welfare, and Political Competition," The Quarterly Journal of Economics, Oxford University Press, vol. 131(1), pages 461-518.
    2. Boyer, Pierre C. & Koriyama, Yukio & Schulte, Elisabeth, 2016. "Legitimacy of mechanisms for public good provision," Economics Letters, Elsevier, vol. 146(C), pages 120-122.
    3. Hoffmann, Timo & Renes, Sander, 2016. "Flip a coin or vote : an Experiment on choosing group decision," Working Papers 16-11, University of Mannheim, Department of Economics.
    4. Engelmann, Dirk & Grüner, Hans Peter, 2013. "Tailored Bayesian Mechanisms: Experimental Evidence from Two-Stage Voting Games," CEPR Discussion Papers 9544, C.E.P.R. Discussion Papers.

    More about this item


    Public goods provision; Ex post efficiency; Participation constraints; Majority voting;

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods


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