Maximizing social welfare in congestion games via redistribution

Victor Naroditskiy and Richard Steinberg

Games and Economic Behavior, 2015, vol. 93, issue C, 24-41

Abstract: It is well known that efficient use of congestible resources can be achieved via marginal pricing; however, payments collected from the agents generate a budget surplus, which reduces social welfare. We show that an asymptotically first-best solution in the number of agents can be achieved by the appropriate redistribution of the budget surplus back to the agents.

Keywords: Redistribution mechanisms; Congestion; VCG (search for similar items in EconPapers)
JEL-codes: C72 D82 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:93:y:2015:i:c:p:24-41

DOI: 10.1016/j.geb.2015.06.010

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