No externalities: a characterization of efficiency and incentive compatibility with public goods

No externalities: a characterization of efficiency and incentive compatibility with public goods

We show that efficient anonymous incentive compatible (dominant strategy) mechanisms for public goods eliminate externalities, i.e., each individual is unable to change the welfare of anyone else. The characterization is used to derive existence and non-existence results for models with a finite number of individuals and to explain existence results in the continuum. A similar characterization ...

A Characterization of Interim Efficiency with Public Goods Author(s):

A Characterization of Interim Efficiency with Public Goods

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Ex ante efficiency implies incentive compatibility

We show that when agents become informationally negligible in a large economy with asymmetric information, every ex ante efficient allocation must be incentive compatible. This means that any ex ante core or Walrasian allocation is incentive compatible. The corresponding result is false for fixedfinite-agent economies with asymmetric information. An example is also constructed to show that the ...

Survey of Methodologies for Valuing Externalities and Public Goods