Choosing and Sharing
Jérémy Laurent-Lucchetti and
MPRA Paper from University Library of Munich, Germany
Implementing a project, like a nationwide nuclear waste disposal, which benefits all involved agents but brings major costs only to the host is often problematic. In practice, revelation issues and redistributional concerns are significant obstacles to achieving stable agreements. We address these issues by proposing the first mechanism to implement the efficient site (the host with the lowest cost) and share the exact cost while retaining total control over realized transfers. Our mechanism is simple and in the vein of the well-known Divide and Choose procedure. The unique Nash equilibrium outcome of our mechanism coincides with truthtelling, is budget-balanced, individually rational and immune to coalitional deviations. More generally, our mechanism can also handle the symmetric case of positive local externalities (e.g., Olympic Games) and even more complex situations where the usefulness of the project---regardless of its location---is not unanimous.
Keywords: Public goods; local externalities; NIMBY; implementation; mechanism design; VCG mechanisms (search for similar items in EconPapers)
JEL-codes: C70 D61 H41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-cta, nep-pbe, nep-ppm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/14929/1/MPRA_paper_14929.pdf original version (application/pdf)
Journal Article: Choosing and sharing (2011)
Working Paper: Choosing and Sharing (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:14929
Access Statistics for this paper
More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().