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The Walker–Groves–Ledyard mechanism: Improving individual rationality without sacrificing simplicity or stability

Author

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  • Healy, Paul J.
  • Yang, Renkun

Abstract

It is known that no public goods mechanism can be Pareto efficient in Nash equilibrium, individually rational (IR), simple (using a one-dimensional message space), and dynamically stable. The Walker mechanism satisfies all but stability, while the Groves–Ledyard mechanism satisfies all but IR. Here we show that a hybrid between these two mechanisms maintains all of the properties of the Groves–Ledyard mechanism, but with fewer IR failures in expectation.

Suggested Citation

  • Healy, Paul J. & Yang, Renkun, 2026. "The Walker–Groves–Ledyard mechanism: Improving individual rationality without sacrificing simplicity or stability," Journal of Mathematical Economics, Elsevier, vol. 124(C).
    • Handle: RePEc:eee:mateco:v:124:y:2026:i:c:s0304406826000133
    DOI: 10.1016/j.jmateco.2026.103225
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    Keywords

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    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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