Informative Voting and the Samuelson Rule

Felix Bierbrauer () and Marco Sahm ()
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Felix Bierbrauer: Max Planck Institute for Research on Collective Goods, Bonn
Marco Sahm: Lehrstuhl fuer Finanzwissenschaft, Munich, Germany.

No 2006_18, Discussion Paper Series of the Max Planck Institute for Research on Collective Goods from Max Planck Institute for Research on Collective Goods

Abstract: We study the classical free-rider problem in public goods provision in a large economy with uncertainty about the average valuation of the public good. Individual preferences over public goods are shaped by a skill and a taste parameter. We use a mechanism design approach to solve for the optimal utilitarian provision rule. The relevant incentive constraints for information aggregation ensure that individuals be-have as if they were engaging in informative voting over the level of public good provision. It is shown that the use of information by an optimal provision rule is inversely related to the polarization of preferences which results from the properties of the skill distribution.

Keywords: information aggregation; informative voting; public goods; two-dimensional heterogeneity (search for similar items in EconPapers)
JEL-codes: D71 D72 D82 H41 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2006-08
New Economics Papers: this item is included in nep-cdm, nep-mic, nep-pbe and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:mpg:wpaper:2006_18

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