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23-09-2021 | Original Paper

The pivotal mechanism versus the voluntary contribution mechanism: an experimental comparison

Journal:
Social Choice and Welfare
Authors:
Tatsuki Homma, Ryosuke Iba, Junyi Shen, Takuma Wakayama, Hirofumi Yamamura, Takehiko Yamato
Important notes
We are grateful to the associate editor and two anonymous referees for their constructive comments and suggestions. We also thank Emiko Fukuda, Tomoya Kazumura, Ryo Kawasaki, and Ken-Ichi Shimomura for their comments. This work was supported by JSPS KAKENHI Grant Numbers JP22730165, JP22330061, JP25380244, JP26285045, JP15H03328, JP16K03567, JP18K12744, JP19K01541, and JP20K01555.

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Abstract

We conduct an experimental comparison of two well-known mechanisms for undertaking a binary public project: the pivotal mechanism and the voluntary contribution mechanism. We compare the two mechanisms under complete information in which each subject knows the other subjects’ payoffs. We then observe that the voluntary contribution mechanism works better than the pivotal mechanism from the perspectives of Pareto efficiency, individual rationality, and surplus maximization. On the other hand, there is no significant difference between the two mechanisms in terms of decision efficiency. These results suggest that the voluntary contribution mechanism is more favorable than the pivotal mechanism in practical applications.

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