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Overcoming Participation Constraints

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Author Info
Fang, Hanming
Norman, Peter

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Abstract

In incomplete information environments with transferable utility, efficient outcomes are generally implementable unless interim or ex post participation constraints are imposed on the problem. In this paper we show that linking a sufficiently large number of independent but possibly unrelated social decisions, a slightly perturbed Groves mechanism can implement an efficient outcome with probability arbitrarily close to one, while respecting all participation, incentive and balanced budget constraints.

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File URL: http://microeconomics.ca/peter_norman/dup_participationrevisionapril2005.pdf
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Publisher Info
Paper provided by Microeconomics.ca Website in its series Micro Theory Working Papers with number norman-05-04-22-05-35-30.

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Length: 24 pages
Date of creation: 22 Apr 2005
Date of revision: 28 Apr 2005
Handle: RePEc:ubc:pmicro:norman-05-04-22-05-35-30

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Related research
Keywords: Linking; Approximate Efficiency; Groves Mechanism; Participation Constraints;

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This paper has been announced in the following NEP Reports: References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Fang, Hanming & Norman, Peter, 2004. "An Efficiency Rationale for Bundling of Public Goods," Micro Theory Working Papers norman-04-11-21-09-39-13, Microeconomics.ca Website, revised 08 Feb 2005. [Downloadable!]
    Other versions:
  2. Armstrong, Mark, 1999. "Price Discrimination by a Many-Product Firm," Review of Economic Studies, Blackwell Publishing, vol. 66(1), pages 151-68, January. [Downloadable!] (restricted)
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  3. Peter Norman, 2004. "Efficient Mechanisms for Public Goods with Use Exclusions," Review of Economic Studies, Blackwell Publishing, vol. 71(4), pages 1163-1188, October. [Downloadable!] (restricted)
  4. Paul Milgrom & Robert Weber, 1981. "Distributional Strategies for Games with Incomplete Information," Discussion Papers 428R, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
  5. d'Aspremont, Claude & Gerard-Varet, Louis-Andre, 1979. "Incentives and incomplete information," Journal of Public Economics, Elsevier, vol. 11(1), pages 25-45, February. [Downloadable!] (restricted)
  6. Townsend, Robert M, 1982. "Optimal Multiperiod Contracts and the Gain from Enduring Relationships under Private Information," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1166-86, December. [Downloadable!] (restricted)
  7. Copeland, B.R. & Taylor, M.S., 1993. "Trade and Transboundary Pollution," UBC Departmental Archives 93-46, UBC Department of Economics.
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  8. Matthew O Jackson & Hugo F Sonnenschein, 2007. "Overcoming Incentive Constraints by Linking Decisions -super-1," Econometrica, Econometric Society, vol. 75(1), pages 241-257, 01. [Downloadable!] (restricted)
  9. repec:att:wimass:1920015 is not listed on IDEAS
  10. Spagnolo, Giancarlo, 2001. "Issue Linkage, Credible Delegation, and Policy Cooperation," CEPR Discussion Papers 2778, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  11. Carl Bergstrom & Ted Bergstrom, 2004. "The costs and benefits of library site licenses to academic journals," University of California at Santa Barbara, Economics Working Paper Series 2004A, Department of Economics, UC Santa Barbara. [Downloadable!]
  12. Cremer, Jacques & McLean, Richard P, 1988. "Full Extraction of the Surplus in Bayesian and Dominant Strategy Auctions," Econometrica, Econometric Society, vol. 56(6), pages 1247-57, November. [Downloadable!] (restricted)
  13. Groves, Theodore, 1973. "Incentives in Teams," Econometrica, Econometric Society, vol. 41(4), pages 617-31, July. [Downloadable!] (restricted)
  14. Susan Athey & Ilya Segal, 2007. "An Efficient Dynamic Mechanism," Levine's Bibliography 122247000000001134, UCLA Department of Economics. [Downloadable!]
  15. Mailath, George J & Postlewaite, Andrew, 1990. "Asymmetric Information Bargaining Problems with Many Agents," Review of Economic Studies, Blackwell Publishing, vol. 57(3), pages 351-67, July. [Downloadable!] (restricted)
  16. Casella, Alessandra, 2002. "Storable Votes," CEPR Discussion Papers 3508, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  17. Yannis Bakos & Erik Brynjolfsson, 1997. "Bundling Information Goods: Pricing, Profits and Efficiency," Working Paper Series 199, MIT Center for Coordination Science. [Downloadable!]
  18. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Hitoshi Matsushima & Koichi Miyazaki & Nobuyuki Yagi, 2006. "Role of Linking Mechanisms in Multitask Agency with Hidden Information," CIRJE F-Series CIRJE-F-401, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
  2. Tilman Börgers & Peter Norman, 2009. "A note on budget balance under interim participation constraints: the case of independent types," Economic Theory, Springer, vol. 39(3), pages 477-489, June. [Downloadable!] (restricted)
    Other versions:
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