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The Strategy-Proof Provision of Public Goods under Congestion and Crowding Preferences

Matthew Jackson () and Antonio Nicolo' ()

Microeconomics from University Library of Munich, Germany

Abstract: We examine the strategy-proof provision of excludable public goods when agents care not only about the level of provision of a public good, but also the number of consumers. We show that on such domains strategy- proof and efficient social choice functions satisfying an outsider independence condition must be rigid in that they must always assign a fixed number of consumers, regardless of individual desires to participate. The fixed number depends on the attitudes of agents regarding group size - being small when congestion effects dominate (individuals prefer to have fewer other consumers) and large when cost sharing effects dominate (agents prefer to have more consumers). A hierarchical rule selects which consumers participate and a variation of a generalized median rule to selects the level of the public good. Under heterogeneity in agents' views on the optimal number of consumers, strategy-proof, efficient, and outsider independent social choice functions are much more limited and in an important case must be dictatorial.

Keywords: Public Goods; Congestion; Club Goods; Strategy-Proof (search for similar items in EconPapers)
JEL-codes: D62 H23 (search for similar items in EconPapers)
Date: 2002-11-04
New Economics Papers: this item is included in nep-cdm, nep-pbe and nep-pol
Note: Type of Document - pdf
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Related works:
Journal Article: The strategy-proof provision of public goods under congestion and crowding preferences (2004) Downloads
Working Paper: The Strategy-Proof Provision of Public Goods Under Congestion and Crowding Preferences (2002) Downloads
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