The MDP Procedure for public goods and local strategy proofness

Kimitoshi Sato ()
Additional contact information
Kimitoshi Sato: Tohoku University

Journal of Economic Structures, 2016, vol. 5, issue 1, 1-31

Abstract: Abstract This paper revisits the family of MDP Procedures and analyzes their properties. It also reviews the procedure developed by Sato (Econ Stud Q 34:97–109, 1983) which achieves aggregate correct revelation in the sense that the sum of the Nash equilibrium strategies always coincides with the aggregate value of the correct marginal rates of substitution. The procedure named the Generalized MDP Procedure can possess other desirable properties shared by continuous-time locally strategy proof planning procedures, i.e., feasibility, monotonicity and Pareto efficiency. Under myopia assumption, each player’s dominant strategy in the local incentive game associated at any iteration of the procedure is proved to reveal his/her marginal rate of substitution for a public good. In connection with the Generalized MDP Procedure, this paper analyzes the structure of the locally strategy proof procedures as algorithms and game forms. An alternative characterization theorem of locally strategy proof procedures is given by making use of the new condition, transfer independence. A measure of incentives is proposed to show that the exponent attached to the decision function of public good is characterized. A Piecewise Nonlinearized MDP Procedure is presented, which is coalitionally locally strategy proof. Equivalence between price-guided and quantity-guided procedures is also discussed.

Keywords: Aggregate correct revelation; Coalitional local strategy proof; Fujigaki–Sato Procedure; Generalized MDP Procedure; Local strategy proof; Measure of incentives; Piecewise Nonlinearized MDP Procedure; Price-quantity equivalence; Transfer independence (search for similar items in EconPapers)
JEL-codes: H41 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1186/s40008-016-0040-0 Abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:jecstr:v:5:y:2016:i:1:d:10.1186_s40008-016-0040-0

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40008

DOI: 10.1186/s40008-016-0040-0

Access Statistics for this article

Journal of Economic Structures is currently edited by Shigemi Kagawa and Kazuhiko Nishimura

More articles in Journal of Economic Structures from Springer, Pan-Pacific Association of Input-Output Studies (PAPAIOS) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().