Strategy-proof cost sharing under increasing returns: Improvement of the supremal welfare loss

Kazuhiko Hashimoto and Hiroki Saitoh

Games and Economic Behavior, 2015, vol. 89, issue C, 101-121

Abstract: We consider a mechanism design problem in economies with increasing returns. We construct a new class of rules, called w-hybrid rules, and characterize them by strategy-proofness, anonymity, envy-freeness, consumer sovereignty, and non-bossiness. We show that w-hybrid rules improve the supremal welfare loss compared with the average cost pricing rule (Moulin, 1999 and Moulin and Shenker, 2001).

Keywords: Strategy-proofness; Cost sharing; Increasing returns; Supremal welfare loss; Average cost pricing; Hybrid rule (search for similar items in EconPapers)
JEL-codes: D71 D78 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:89:y:2015:i:c:p:101-121

DOI: 10.1016/j.geb.2014.12.004

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