A fair pivotal mechanism for nonpecuniary public goods

Marcus Pivato

MPRA Paper from University Library of Munich, Germany

Abstract: The Clarke pivotal mechanism is inappropriate for nonpecuniary public goods, because the assumption of quasilinear utility is invalid, and because the mechanism gives disproportionate influence to wealthier voters. But by introducing a `stochastic' Clarke tax, we can convert any separable utility function into a quasilinear one. Also, by stratifying a large population by wealth, and applying different `weights' to the votes from different wealth-strata, we can ensure that the mechanism is `fair' in the sense that the voters in different strata all have equal influence (on average) over the outcome. These weights can be fine-tuned to their optimal values over time, by using the rich dataset generated by a series of large-population referenda. The result is a fair, strategy-proof implementation of weighted utilitarian social choice over nonpecuniary public goods.

Keywords: pivotal mechanism; strategy-proof implementation; nonpecuniary public good; utilitarian; inequality (search for similar items in EconPapers)
JEL-codes: D61 H41 (search for similar items in EconPapers)
Date: 2011-11-04
New Economics Papers: this item is included in nep-mic and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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