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Choosing and sharing

Jérémy Laurent-Lucchetti and Justin Leroux

Games and Economic Behavior, 2011, vol. 73, issue 1, 296-300

Abstract: Implementing a project, like a nationwide nuclear waste disposal, which benefits all involved agents but brings major costs only to the host is often problematic. In practice, revelation issues and redistributional concerns are significant obstacles to achieving stable agreements. We address these issues by proposing the first mechanism to select the efficient site (the host with the lowest cost) while simultaneously allowing for the implementation of any individually rational division of the whole hosting cost. The subgame perfect Nash equilibria of our simple mechanism are efficient, budget-balanced and individually rational. Moreover, the truthful equilibrium is immune to coalitional deviations.

Keywords: Public; goods; Local; externalities; NIMBY; Implementation; Mechanism; design; VCG; mechanisms; Divide; and; choose (search for similar items in EconPapers)
Date: 2011
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Working Paper: Choosing and Sharing (2009) Downloads
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Handle: RePEc:eee:gamebe:v:73:y:2011:i:1:p:296-300