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

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  • Yukio Koriyama

    (X-DEP-ECO - Département d'Économie de l'École Polytechnique - X - École polytechnique)

  • Peter Gruner

Abstract

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 agents' interim participation constraints. In this case, ex post inefficient voting mechanisms can be replaced by efficient ones without reducing any individual's 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 (), an asymptotic possibility is obtained for certain type distributions.

Suggested Citation

  • Yukio Koriyama & Peter Gruner, 2012. "Public goods, participation constraints, and democracy: A possibility theorem," Post-Print hal-00689774, HAL.
  • Handle: RePEc:hal:journl:hal-00689774
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00689774
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    References listed on IDEAS

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    Cited by:

    1. Dirk Engelmann & Hans Peter Grüner, 2017. "Tailored Bayesian Mechanisms: Experimental Evidence from Two-Stage Voting Games," CESifo Working Paper Series 6405, CESifo Group Munich.
    2. 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.
    3. Felix Bierbrauer & Pierre C. Boyer, 2014. "Efficiency, Welfare, and Political Competition," CESifo Working Paper Series 4814, CESifo Group Munich.
    4. Boyer, Pierre C. & Koriyama, Yukio & Schulte, Elisabeth, 2016. "Legitimacy of mechanisms for public good provision," Economics Letters, Elsevier, vol. 146(C), pages 120-122.
    5. 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.

    More about this item

    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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