Article ID Journal Published Year Pages File Type
968649 Journal of Public Economics 2016 7 Pages PDF
Abstract

•We study the optimal provision of a public good by dominant-incentive compatible mechanisms.•A simple voting mechanism is optimal among all mechanisms that are dominant-incentive-compatible, deficit-free, and kind.•The optimal voting mechanism outperforms the symmetric pivotal mechanism.

In this paper, we study the optimal provision of a costly public good using an average efficiency criterion. For every fixed cost, we identify a quota mechanism as the optimal mechanism among those that are dominant-incentive-compatible, deficit-free and kind. Moreover, we also consider the asymmetric case and demonstrate that a committee mechanism is optimal for a large class of mechanisms. In particular, this mechanism dominates all VCG (pivotal) mechanisms.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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