 Evolutionary implementation in a public goods gameRatul Lahkar () and Saptarshi Mukherjee Journal of Economic Theory, 2019, vol. 181, issue C, 423-460 Abstract: We consider implementation of the efficient state in a large population public goods game. Due to positive externalities, the efficient state is different from the Nash equilibrium of the game. We apply a transfer scheme equal to the externality in the game. The externality adjusted public goods game is a potential game with a unique Nash equilibrium, which is the efficient state of the original game. It is also a continuous–strategy aggregative game. We introduce the best response dynamic for such aggregative potential games to show evolutionary implementation. Agents converge to the efficient state under this dynamic in the externality adjusted game. We extend this result to other prominent evolutionary dynamics. The pure externality price scheme, however, causes a budget deficit. A modification of this scheme solves this problem while evolutionarily implementing efficiency. Keywords: Public goods; Externalities; Potential games; VCG mechanism; Evolutionary dynamics; Budget balance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:181:y:2019:i:c:p:423-460 DOI: 10.1016/j.jet.2019.03.009 Access Statistics for this article Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell More articles in Journal of Economic Theory from Elsevier |
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