Choosing and Sharing
Choosing a project for which benefits accrue to all involved agents but brings major costs or additional benefits to only one agent is often problematic. Siting a nationwide nuclear waste disposal or hosting a major sporting event are examples of such a problem: costs or benefits are tied to the identity of the host of the project. Our goals are twofold: to choose the efficient site (the host with the lowest cost or the highest localized surplus) and to share the cost, or surplus, in a predetermined way so as to achieve redistributive goals. We propose a simple mechanism to implement both objectives. The unique subgame-perfect Nash equilibrium of our mechanism coincides with truthtelling, is efficient, budget-balanced and immune to coalitional deviations.
|Date of creation:||Dec 2007|
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References listed on IDEAS
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- EHLERS, Lars, 2005. "Choosing Wisely: The Natural Multi-Bidding Mechanism," Cahiers de recherche 2005-14, Universite de Montreal, Departement de sciences economiques.
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- Jeremy Laurent-lucchetti & Justin Leroux, 2010. "Lindahl prices solve the NIMBY problem," Economics Bulletin, AccessEcon, vol. 30(3), pages 2457-2463. Full references (including those not matched with items on IDEAS)