Endogenous Community Formation and Collective Provision - A Procedurally Fair Mechanism

Werner Güth ()

No 2013-013, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: A group of actors, individuals or firms, can engage in collectively providing projects which may be costly or generating revenues and which may benefit some and harm others. Based on requirements of procedural fairness (Güth and Kliemt, 2013), we derive a bidding mechanism determining endogenously who participates in collective provision, which projects are implemented, and the positive or negative payments due to the participating members. We justify and discuss this procedural fairness approach and compare it with that of optimal, e.g. welfaristic game theoretic mechanism design (e.g. Myerson, 1979).

Keywords: Procedural fairness; Mechanism design; Equality axiom; Public provision; Collective action (search for similar items in EconPapers)
JEL-codes: D44 D46 D61 D62 D63 D71 D72 D73 D74 (search for similar items in EconPapers)
Date: 2013-03-21
New Economics Papers: this item is included in nep-cdm, nep-mic, nep-net and nep-ppm
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Related works:
Journal Article: Endogenous community formation and collective provision – A procedurally fair mechanism (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2013-013

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