On equal cost sharing in the provision of an excludable public good

Jordi Massó, Antonio Nicolò, Arunava Sen, Tridib Sharma, Levent Ütkü

Research output: Working paper

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Abstract

We study the e¢ ciency and fairness properties of the equal cost sharing mechanism in the provision of a binary and excludable public good. According to the maximal welfare loss criterion, equal cost sharing is optimal within the class of strategyproof, individually rational and no-budgetde cit mechanisms only when there are 2 agents. In general the equal cost sharing mechanism is no longer optimal in this class: we provide a class of mechanisms obtained by symmetric perturbations of equal cost sharing with strictly lower maximal welfare loss. We show that if one of two possible fairness conditions is additionally imposed, equal cost sharing mechanism regains optimality.
Original languageEnglish
Publication statusPublished - 1 Jun 2013

Publication series

NameCentro de Investigacion Economica, ITAM. Working Paper
No.1306

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    Ministerio de Educación y Ciencia (MEC)

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