Providing negative cost public projects under a fair mechanism: An experimental analysis
This paper experimentally examines a procedurally fair provision mech- anism allowing members of a small community to determine, via their bids, which of four alternative public projects to implement. Previous experi- ments with positive cost projects have demonstrated that the mechanism is efficiency enhancing. Our experiment tests whether the mechanism re- mains conducive to efficiency when negative cost, but less efficient, projects are made available. We find that this is not the case. On the other hand, we detect no significant difference in bid levels depending on whether mixed feelings are present or absent, and on whether the others' valuations are known or unknown.
|Date of creation:||13 May 2013|
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- Smith, Vernon L, 1977. "The Principle of Unanimity and Voluntary Consent in Social Choice," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1125-39, December.
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- Werner Güth & M. Vittoria Levati & Natalia Montinari, 2012. "Ranking alternatives by a fair bidding rule: a theoretical and experimental analysis," Jena Economic Research Papers 2012-005, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
- Sarah Jacobson & Jason Delaney, 2012. "The Good of the Few: Reciprocity in the Provision of a Public Bad," Department of Economics Working Papers 2012-02, Department of Economics, Williams College.
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