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On Incentive Compatible, Individually Rational Public Good Provision Mechanisms

Author

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  • Takashi Kunimoto

    (School of Economics, Singapore Management University)

  • Cuiling Zhang

    (School of Economics, Singapore Management University)

Abstract

This paper characterizes mechanisms satisfying Bayesian incentive compatibility (BIC) and interim individual rationality (IIR) in the classical public good provision problem. Many papers in the literature obtain the results in the so-called standard model of ex ante identical agents with a continuous, closed interval of types. Although the standard model and more generally a continuum type space are widely used in the literature, it is nonetheless an abstraction of reality. Given that the public good provision problem has occupied a central application in the theory of mechanism design, we propose a "stress test" for the results in the standard model by subjecting them to a fi nite discretization over the standard model. The main contribution of this paper is that many of the known results gained within the standard continuum type space also hold when it is replaced by a discrete type space.

Suggested Citation

  • Takashi Kunimoto & Cuiling Zhang, 2018. "On Incentive Compatible, Individually Rational Public Good Provision Mechanisms," Economics and Statistics Working Papers 21-2018, Singapore Management University, School of Economics.
    • Handle: RePEc:ris:smuesw:2018_021
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    Cited by:

    1. is not listed on IDEAS
    2. Peipei Liang & Youqing Lv & Yajuan Zhao, 2024. "Incentive-compatible mechanism for manufacturing carbon emission supervision under carbon control policies in China," PLOS ONE, Public Library of Science, vol. 19(5), pages 1-19, May.
    3. Jin Xi & Haitian Xie, 2023. "Strength in numbers: robust mechanisms for public goods with many agents," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 61(3), pages 649-683, October.

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    Keywords

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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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