The ratio equilibrium and a voting game in a public goods economy

doi:10.1016/0022-0531(77)90001-1

Journal of Economic Theory

Volume 16, Issue 2, December 1977, Pages 123-136

https://doi.org/10.1016/0022-0531(77)90001-1 Get rights and content

Abstract

An economic model of the allocation process with public goods is presented. We define a concept of equilibrium and prove the existence. Next we present a voting game in which a level of the public goods to be produced is decided. We prove that the core of the voting game and the equilibria exist simultaneously, and that they coincide.

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Citation Excerpt :
These can be found in the work of Groves and Ledyard (1977), Hurwicz (1979), Walker (1981), Tian (1989), Kim (1993), Peleg (1996), Falkinger (1996) and Chen (2002). Other implementation concepts include perfect Nash equilibrium (Bagnoli and Lipman, 1989), undominated Nash equilibrium (Jackson and Moulin, 1992), subgame perfect equilibrium (Varian, 1994b), strong equilibrium (Corchon and Wilkie, 1996), and the core (Kaneko, 1977), etc. Apart from the above non-Bayesian mechanisms, Ledyard and Palfrey (1994) propose a class of Bayesian Nash mechanisms for public goods provision.
The presence of public goods seriously challenges traditional or “natural” solutions for the allocation of private goods. Important policy questions, of whether this chapter can rely on the market to provide optimal amounts of public goods such as air pollution, and how much we can rely on “natural” processes such as voluntary contribution to solve environmental problems, boil down to fundamental issues about human nature, i.e., about whether people are selfish or cooperative. Existing experiments on incentive-compatible mechanisms have focused on a few mechanisms. The data, combined with theoretical investigation, give us a fresh perspective on implementation among real people. For these mechanisms that have been studied in the laboratory, need more replications and robustness tests. Meanwhile, many mechanisms have never been tested in the laboratory. Equilibrium selection problem is almost untouched in this context. Therefore, more experiments should be conducted in this exciting field.
The core coincides with the nucleolus allocations in a public goods economy with taxation
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The ratio equilibrium and a voting game in a public goods economy

Abstract

J. Econ. Theory

J. Econ. Theory

J. Econ. Theory

Social Choice and Individual Values

On the rationale of group decision-making

J. Political Econ.

The Demand and Supply of Public Goods

On the Cores in Economies with Public Goods

How to share the cost of a public good?

Int. J. Game Theory

A limit theorem on the core of an economy

Int. Econ. Rev.

Social decisions without social preferences

Stability of voting

Econometrica

A generalization of the pure theory of public goods

Amer. Econ. Rev.