Serial cost sharing of excludable public goods: general cost functions |
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Authors: | James A Dearden |
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Institution: | (1) Department of Economics, 621 Taylor Street, Lehigh University, Bethlehem, PA 18015, USA, US |
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Abstract: | Summary. A group of individuals meet to share the cost and determine output allocations of a partial-excludable public good. We demonstrate
that, for general cost functions and preferences that satisfy the Spence-Mirlees sorting condition, the serial cost-sharing
formula (Moulin, 1994) has remarkable incentive properties. First, a direct economic mechanism that uses the serial formula is coalition strategy-proof, envy-free and satisfies the stand-alone property.
Second, the serial mechanism involves partial exclusion, which is important for the reduction of the free-rider problem.
Received: June 10, 1996; revised version; February 11, 1997 |
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Keywords: | JEL Classification Numbers: C72 D71 D82 |
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