Nash implementation of Lindahl allocations

✍ Scribed by Pierre Trenqualye

• Publisher: Springer
• Year: 1994
• Tongue: English
• Weight: 659 KB
• Volume: 11
• Category: Article
• ISSN: 0176-1714
• DOI: 10.1007/bf00182899

✦ Synopsis

We define a class of Nash based mechanisms that implement Lindahl allocations in standard public good economies. As those that first proved Nash implementation of Lindahl allocations, defined by Hurwicz (1979) andWalker (1981), the mechanisms provided here are continuous, feasible, and independent of agents' characteristics. In economies with two agents (e.g., bilateral monopolies, duopolies, principal-agent models), our mechanisms are also applicable, in contrast to the well-behaved mechanisms in the literature, and they satisfy favourable stability properties.

1 -m 3 ( k + ) + m , ( k ) = O .

Once can check that the unique equilibrittm (defined by m * = m 2 * --m 3 * = a / 3 ) may not be locally stable. (This can be proved, for example, by showing that if the preference parameter c~ is sufficiently small, then the evolution of