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The Strategy-Proof Provision of Public Goods Under Congestion and Crowding Preferences

  • Jackson, Matthew O.
  • Nicolo, Antonio

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 California Institute of Technology, Division of the Humanities and Social Sciences in its series Working Papers with number 1148.

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Date of creation: Nov 2002
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Publication status: Published: published in Journal of Economic Theory, 2004, V. 115, #2, pp. 278-308.
Handle: RePEc:clt:sswopa:1148
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  1. Salvador Barberà, 2001. "An introduction to strategy-proof social choice functions," Social Choice and Welfare, Springer, vol. 18(4), pages 619-653.
  2. Deb, Rajat & Razzolini, Laura, 1999. "Auction-Like Mechanisms for Pricing Excludable Public Goods," Journal of Economic Theory, Elsevier, vol. 88(2), pages 340-368, October.
  3. Salvador Barbera, 1995. "Strategy-Proof Allotment Rules," Discussion Papers 1142, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  4. Barbera, S. & Masso, J. & Neme, A., 1992. "Voting Under Constraints," UFAE and IAE Working Papers 200.92, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  5. Salvador Barbera & Carmen Bevia, 2000. "Self-Selection Consistent Choices," Econometric Society World Congress 2000 Contributed Papers 1322, Econometric Society.
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  7. Moulin, Herve, 1994. "Serial Cost-Sharing of Excludable Public Goods," Review of Economic Studies, Wiley Blackwell, vol. 61(2), pages 305-25, April.
  8. Moulin, Herve & Shenker, Scott, 1992. "Serial Cost Sharing," Econometrica, Econometric Society, vol. 60(5), pages 1009-37, September.
  9. Barbera, Salvador & Bevia, Carmen, 2002. "Self-Selection Consistent Functions," Journal of Economic Theory, Elsevier, vol. 105(2), pages 263-277, August.
  10. Salvador Barbera & Matthew Jackson, 1991. "A Characterization of Strategy-Proof Social Choice Functions for Economies with Pure Public Goods," Discussion Papers 964, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  11. Green, Jerry & Laffont, Jean-Jacques, 1977. "Characterization of Satisfactory Mechanisms for the Revelation of Preferences for Public Goods," Econometrica, Econometric Society, vol. 45(2), pages 427-38, March.
  12. Groves, Theodore, 1973. "Incentives in Teams," Econometrica, Econometric Society, vol. 41(4), pages 617-31, July.
  13. David Cantala, 2004. "Choosing the level of a public good when agents have an outside option," Social Choice and Welfare, Springer, vol. 22(3), pages 491-514, 06.
  14. Bogomolnaia, Anna & Jackson, Matthew O., 2002. "The Stability of Hedonic Coalition Structures," Games and Economic Behavior, Elsevier, vol. 38(2), pages 201-230, February.
  15. LE BRETON, Michel & WEBER, Shlomo, 2001. "The art of making everybody happy: how to prevent a secession," CORE Discussion Papers 2001011, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  16. Michel Le Breton & Shlomo Weber, 2001. "The Art of Making Everybody Happy; How to Prevent a Secession," IMF Working Papers 01/176, International Monetary Fund.
  17. H. Moulin, 1980. "On strategy-proofness and single peakedness," Public Choice, Springer, vol. 35(4), pages 437-455, January.
  18. Anna Bogomolnaia & Antonio Nicolo, 2005. "Stable Assignment of Public Facilities under Congestion," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(1), pages 65-91, 02.
  19. repec:cup:cbooks:9780521477185 is not listed on IDEAS
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