Mechanism design for the environment

Sandeep Baliga () and Eric S. Maskin

Chapter 07 in Handbook of Environmental Economics, 2003, vol. 1, pp 305-324 from Elsevier

Abstract: We argue that when externalities such as pollution are nonexcludable, agents must be compelled to participate in a "mechanism" to ensure a Pareto-efficient outcome. We survey some of the main findings of the mechanism-design (implementation-theory) literature -- such as the Nash implementation theorem, the Gibbard-Satterthwaite theorem, the Vickrey-Clarke-Groves mechanism, and the Arrow/d'Aspremont-Gerard-Varet mechanism -- and consider their implications for the environment, in particular the reduction of aggregate emissions of pollution. We consider the cases of both complete and incomplete information.

JEL-codes: Q50 (search for similar items in EconPapers)
Date: 2003

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Related works:
Working Paper: Mechanism Design for the Environment (2002)
Working Paper: Mechanism Design for the Environment (2003)
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