On cost sharing in the provision of a binary and excludable public good
Massó, Jordi (Universitat Autònoma de Barcelona. Departament d'Economia i d'Història Econòmica)
Nicolò, Antonio (University of Manchester)
Sen, Arunava (Indian Statistical Institute)
Sharma, Tradib (Centro de Investigación Económica (México))
Ülkü, Levent (Centro de Investigación Económica (México))

Data:	2015
Resum:	We study efficiency and fairness properties of the equal cost sharing with maximal participation (ECSMP) mechanism in the provision of a binary and excludable public good. According to the maximal welfare loss criterion, the ECSMP is optimal within the class of strategyproof, individually rational and no-deficit mechanisms only when there are two agents. In general the ECSMP mechanism is not optimal: we provide a class of mechanisms obtained by symmetric perturbations of ECSMP with strictly lower maximal welfare loss. We show that if one of two possible fairness conditions is additionally imposed, the ECSMP mechanism becomes optimal.
Ajuts:	Ministerio de Ciencia e Innovación SEV-2011-0075 Agència de Gestió d'Ajuts Universitaris i de Recerca 2009/SGR-419
Nota:	Jordi Massó acknowledges financial support from the Spanish Ministry of Economy and Competitiveness, through the Severo Ochoa Programme for Centers of Excellence in R&D (SEV-2011-0075) and FEDER grant ECO2008-04756 (Grupo Consilidado-C), and from the Generalitat de Catalunya, through the prize "ICREA Academia" for excellence in research and grant SGR2009-419. Antonio Nicolò's work is partially supported by the project "Intelligent preference reasoning for multi-agent decision making" (Univ. of Padova).
Nota:	Altres ajuts: FEDER/ECO2008-04756
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Document:	Article
Matèria:	Binary public good ; Excludability ; Equal cost sharing ; Maximal welfare loss
Publicat a:	Journal of economic theory, Vol. 155 (2015), p. 30-49, ISSN 1095-7235

Preprint 33 p, 477.2 KB

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