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Mechanism Design and Voting for Public-Good Provision

  • Felix Bierbrauer

    ()

    (Max Planck Institute for Research on Collective Goods, Bonn)

  • Martin Hellwig

    ()

    (Max Planck Institute for Research on Collective Goods, Bonn)

We propose a new approach to the normative analysis of public-good provision. In addition to individual incentive compatibility, we impose conditions of robust implementability and coalition proofness. Under these additional conditions, participants' contributions can only depend on the level of public-good provision. For a public good that comes as a single indivisible unit, provision can only depend on the population share of people in favour of provision. Robust implementability and coalition proofness thus provide a foundation for the use of voting mechanisms. The analysis is also extended to a specifi cation with more than two public-good provision levels.

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Paper provided by Max Planck Institute for Research on Collective Goods in its series Working Paper Series of the Max Planck Institute for Research on Collective Goods with number 2011_31.

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Date of creation: Dec 2011
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Handle: RePEc:mpg:wpaper:2011_31
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  1. Laffont & Martimort, 1997. "Collusion under asymmetric information," Working Papers 152574, Institut National de la Recherche Agronomique, France.
  2. Neeman, Zvika, 2004. "The relevance of private information in mechanism design," Journal of Economic Theory, Elsevier, vol. 117(1), pages 55-77, July.
  3. Dirk Bergemann & Stephen Morris, 2005. "Robust Mechanism Design," NajEcon Working Paper Reviews 666156000000000593, www.najecon.org.
  4. Jean-Jacques Laffont & David Martimort, 2000. "Mechanism Design with Collusion and Correlation," Econometrica, Econometric Society, vol. 68(2), pages 309-342, March.
  5. d'Aspremont, Claude & Gerard-Varet, Louis-Andre, 1979. "Incentives and incomplete information," Journal of Public Economics, Elsevier, vol. 11(1), pages 25-45, February.
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  7. Groves, Theodore, 1973. "Incentives in Teams," Econometrica, Econometric Society, vol. 41(4), pages 617-31, July.
  8. Ledyard, John O., 1978. "Incentive compatibility and incomplete information," Journal of Economic Theory, Elsevier, vol. 18(1), pages 171-189, June.
  9. Cremer, Jacques & McLean, Richard P, 1985. "Optimal Selling Strategies under Uncertainty for a Discriminating Monopolist When Demands Are Interdependent," Econometrica, Econometric Society, vol. 53(2), pages 345-61, March.
  10. Dirk Bergemann & Stephen Morris, 2009. "Robust Implementation in Direct Mechanisms," Review of Economic Studies, Oxford University Press, vol. 76(4), pages 1175-1204.
  11. Hindriks, Jean & Myles, Gareth D., 2013. "Intermediate Public Economics," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262018691, June.
  12. Felix Bierbrauer & Martin Hellwig, 2010. "Public-Good Provision in a Large Economy," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2010_02, Max Planck Institute for Research on Collective Goods.
  13. Martin Hellwig, 2011. "Incomplete-Information Models of Large Economies with Anonymity: Existence and Uniqueness of Common Priors," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2011_08, Max Planck Institute for Research on Collective Goods.
  14. Cremer, Jacques & McLean, Richard P, 1988. "Full Extraction of the Surplus in Bayesian and Dominant Strategy Auctions," Econometrica, Econometric Society, vol. 56(6), pages 1247-57, November.
  15. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, June.
  16. Felix Bierbrauer, 2010. "Optimal Income Taxation and Public-Goods Provision with Preference and Productivity Shocks," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2010_18, Max Planck Institute for Research on Collective Goods.
  17. Bernheim, B. Douglas & Peleg, Bezalel & Whinston, Michael D., 1987. "Coalition-Proof Nash Equilibria I. Concepts," Journal of Economic Theory, Elsevier, vol. 42(1), pages 1-12, June.
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