Strategy-Proofness and Efficiency of Probabilistic Mechanisms for Excludable Public Good

Kazuhiko Hashimoto and Kohei Shiozawa

No e118, Working Papers from Tokyo Center for Economic Research

Abstract: We study strategy-proof probabilistic mechanisms in a binary excludable public good model. We construct a new class of probabilistic mechanisms satisfying strategy-proofness, called mechanisms. We first show that the mechanisms are second-best efficient. Next, we identify the optimal mechanism with respect to the supremal welfare loss, and show that it improves the inefficiency of the equal cost sharing with maximal participation mechanism [Moulin (1994)] and the anonymous augmented serial mechanisms [Ohseto (2005)].

Pages: 35 pages
Date: 2018-01
New Economics Papers: this item is included in nep-des, nep-gth and nep-mic
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