Van Essen, Matthew J. (2008): A Simple Supermodular Mechanism that Implements Lindahl Allocations.
This is the latest version of this item.
Download (274kB) | Preview
This paper introduces a new incentive compatible mechanism which for general preference environments implements Lindahl allocations as Nash equilibria. The mechanism does not increase in structural complexity as consumers are added to the economy, the minimum dimension of data needed to compute payoffs is smaller than other mechanisms with comparable properties; and for quasi-linear environments, the mechanism induces a supermodular game for appropriate choices of the mechanism parameters. Thus, this new Lindahl mechanism provides a connection between the desirable welfare properties of Lindahl allocations and the desirable theoretical/ convergence properties of supermodular games.
|Item Type:||MPRA Paper|
|Original Title:||A Simple Supermodular Mechanism that Implements Lindahl Allocations|
|Keywords:||Lindahl Equilibrium; Nash Implementation; Supermodular Games|
|Subjects:||H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H21 - Efficiency; Optimal Taxation
D - Microeconomics > D0 - General > D02 - Institutions: Design, Formation, and Operations
C - Mathematical and Quantitative Methods > C6 - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling > C62 - Existence and Stability Conditions of Equilibrium
C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games
|Depositing User:||Matthew J. Van Essen|
|Date Deposited:||21. May 2009 13:41|
|Last Modified:||23. Feb 2013 21:52|
Amir, R. (2005). "Supermodularity and Complementarity in Economics: an Elementary Survey." Southern Economics Journal, 71.
Bailey, M. (1994). "Lindahl Mechanisms and Free Riders." Public Choice, 80, 35-39.
Bergstrom, T. and Cornes, R. (1983). "Independence of Allocative Efficiency from Distribution in the Theory of Public Goods." Econometrica, 51, 1753-1765.
Chen, Y. and Tang, F. (1998). "Learning and Incentive Compatible Mechanisms for Public Good Provision: An Experimental Study," Journal of Political Economy, 106: 633-662.
Chen, Y., (2002). "A family of supermodular Nash mechanisms implementing Lindahl allocations," Economic Theory 19, 773-790.
Chen, Y. and Gazzale, R. (2004). "When does Learning in Games Generate Convergence to Nash Equilibria? The Role of Supermodularity in an Experimental Setting." American Economic Review, 94, 1505-1535.
Debreau, G. (1959). Theory of Value. New York: John Wiley & Sons.
de Trenqualye, P. (1989). "Stable Implementation of Lindahl Allocations." Economic Letters 29, 291-294.
de Trenqualye, P. (1994). "Nash implementation of Lindahl allocations." Social Choice Welfare 11, 83-94.
Foley, D. (1970). "Lindahl's Solution and the Core of an Economy with Public Goods." Econometrica, 38, 66-72.
Groves, T. and Ledyard, J. (1977). "A Solution to the "Free Rider" Problem." Econometrica, 45, 783-809.
Groves, T. and Ledyard, J. (1980). "The Existence of Efficient and Incentive Compatible Equilibria with Public Goods." Econometrica, 48, 1487-1506.
Healy, P., (2004). "Learning Dynamics for Mechanism Design: An Experimental Comparison of Public Goods Mechanisms," Journal of Economic Theory.
Hurwicz, L. (1979). "Outcome Functions Yielding Walrasian and Lindahl Allocations at Nash Equilibrium Points." The Review of Economic Studies 46, 217-224.
Kim, T. (1987). "Stability Problems in the Implementation of Lindahl Allocations." Doctoral Thesis. University of Minnesota.
Kim, T. (1993). "A Stable Nash mechanism implementing Lindahl allocations for quasi-linear environments." Journal of Mathematical Economics, 22, 359-371.
Kim, T. (1996). "A Stable Nash Mechanism for Quasi-Additive Public-Good Environments." Japanese Economic Review 47, 144-156.
Lindahl, E. (1919). "Just Taxation--A Positive Solution." English translation of portion of Die Gerechtigkeit der Besteuerung, in Classics in the Theory of Public Finance, edited by R. Musgrave and A. Peacock. New York: MacMillan, 1958, 168-176.
Milgrom, P., and Roberts, J. (1990a). "Rationalizability, Learning, and Equilibrium in Games with Strategic Complimentarities." Econometrica, 58, 1255-1277.
Milgrom, P., and Roberts, J. (1990b). "Adaptive and Sophisticated Learning in Normal Form Games." Games and Economic Behavior, 3, 82-100.
Milleron, Jean-Claude. (1972). "Theory of Value with Public Goods: A Survey Article." Journal of Economic Theory 5, 419-477.
Muench, T. and Walker, M. (1983). "Are Groves-Ledyard Equilibria Attainable?" The Review of Economic Studies 50, 393-396.
Smith, V. (1979). "An Experimental Comparison of Three Public Good Decision Mechanisms." Scandinavian Journal of Economics, 81, 198-215.
Smith, V. (1980). "Experiments with a Decentralized Mechanism for Public Good Decisions." American Economic Review 70, 584-599.
Topkis, D. (1998). Supermodularity and Complimentarity. Princeton: Princeton University Press
Van Essen, M., Lazzati, N., and Walker, M. (2008). "Learning to Achieve the Lindahl Allocation." University of Arizona Working Paper.
Varian, H. (1994). "A Solution to the Problem of Externalities When Agents Are Well-Informed." The American Economic Review, 84, 1278-1293.
Vega-Redondo, F. (1989). "Implementation of Lindahl Equilibrium: An Integration of the Static and Dynamic Approaches." Mathematical Social Sciences, 18, 211-228.
Vives (1990). "Nash Equilibrium with Strategic Complimentarities." Journal of Mathematical Economics, 19, 305-321.
Walker, M., (1980). "On the Nonexistence of a Dominant Strategy Mechanism for Making Optimal Public Decisions." Econometrica, 48, 1521-1540.
Walker, M., (1981). "A Simple Incentive Compatible Scheme for Attaining Lindahl Allocations," Econometrica 49, 65-71.
Available Versions of this Item
A Simple Supermodular Mechanism that Implements Lindahl Allocations. (deposited 17. Jan 2009 05:45)
A Simple Supermodular Mechanism that Implements Lindahl Allocations. (deposited 21. May 2009 13:23)
- A Simple Supermodular Mechanism that Implements Lindahl Allocations. (deposited 21. May 2009 13:41) [Currently Displayed]
- A Simple Supermodular Mechanism that Implements Lindahl Allocations. (deposited 21. May 2009 13:23)