Strategy-proof allocation of fixed costs

James Dearden () and Karl Einolf ()

Review of Economic Design, 2003, vol. 8, issue 2, 185-204

Abstract: An economy can produce and consume a fixed-cost excludable public good only if its members fully fund the cost of the good. In this paper, we characterize the entire class of mechanisms for the provision of the public good and its cost that are Pareto optimal among the set of strategy-proof, voluntarily-participatory, budget-balancing, non-bossy, and replacement-monotonic mechanisms. We demonstrate that this class of mechanisms is quite small and can be characterized as simple step-price mechanisms. Copyright Springer-Verlag Berlin/Heidelberg 2003

Keywords: Cost sharing; strategy-proofness (search for similar items in EconPapers)
Date: 2003
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DOI: 10.1007/s10058-003-0095-x

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