Maximizing social welfare in congestion games via redistribution

Victor Naroditskiy and Richard Steinberg

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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)
Pages: 18 pages
Date: 2015-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in Games and Economic Behavior, September, 2015, 93, pp. 24-41. ISSN: 0899-8256

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