Collective decisions with interdependent valuations |
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Authors: | Hans Peter Grü ner,Alexandra Kiel |
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Affiliation: | a Department of Economics, University of Mannheim, L7, 3-5, 68131 Mannheim, Germany b IZA, P.O. Box 7240, 53072 Bonn, Germany c CEPR, 90-98 Goswell Road, London ECIV 7RR, UK |
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Abstract: | Many collective decision problems have in common that individuals’ desired outcomes are correlated but not identical. This paper studies collective decisions with private information about desired policies. Each agent holds private information which mainly concerns his own bliss point, but private information also affects all other agents. We concentrate on two specific mechanism, the median and mean mechanisms establish the existence of symmetric Bayesian Nash equilibria of the corresponding games and compare the performance of the mechanisms for different degrees of interdependencies. Applications of our framework include the provision of public goods and the design of decision processes in international organizations. |
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Keywords: | D78 D82 H41 |
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