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Voluntary Participation in the Design of Non-excludable Public Goods Provision Mechanisms

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  • Tatsuyoshi Saijo
  • Takehiko Yamato

Abstract

Groves-Ledyard (1977) constructed a mechanism attaining Pareto efficient allocations in the presence of public goods. After this path-breaking paper, many mechanisms have been proposed to attain desirable allocations with public goods. Thus, economists have thought that the free-rider problem is solved, in theory. Our view to this problem is not so optimistic. Rather, we propose fundamental impossibility theorems with public goods. In the previous mechanism design, it was implicitly assumed that every agent must participate in the mechanism that the designer provides. This approach neglects one of the basic features of public goods: non-excludability. We explicitly incorporate non-excludability and then show that it is impossible to construct a mechanism in which every agent has an incentive to participate.

Suggested Citation

  • Tatsuyoshi Saijo & Takehiko Yamato, 2001. "Voluntary Participation in the Design of Non-excludable Public Goods Provision Mechanisms," ISER Discussion Paper 0559, Institute of Social and Economic Research, Osaka University.
  • Handle: RePEc:dpr:wpaper:0559
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    File URL: http://www.iser.osaka-u.ac.jp/library/dp/2001/dp0559.pdf
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    References listed on IDEAS

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    1. Timothy Cason & Tatsuyoshi Saijo & Takehiko Yamato, 2002. "Voluntary Participation and Spite in Public Good Provision Experiments: An International Comparison," Experimental Economics, Springer;Economic Science Association, vol. 5(2), pages 133-153, October.
    2. repec:cup:apsrev:v:79:y:1985:i:01:p:62-78_22 is not listed on IDEAS
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    Cited by:

    1. Cason, Timothy N. & Saijo, Tatsuyoshi & Yamato, Takehiko & Yokotani, Konomu, 2004. "Non-excludable public good experiments," Games and Economic Behavior, Elsevier, vol. 49(1), pages 81-102, October.
    2. Tatsuyoshi Saijo & Takehiko Yamato & Konomu Yokotani, 2003. "Non-Excludable Public Good Experiments revised October 2003, forthcoming in Games and Economic Behavior," Discussion papers 03011, Research Institute of Economy, Trade and Industry (RIETI).

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