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Bartering Games in the Kolm Triangle

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  • MATT VAN ESSEN

Abstract

We study a public good mechanism that possesses several attractive properties. In particular, the mechanism always produces feasible allocations, induces a game where the Nash equilibria are all individually rational, and, in contrast to the voluntary contribution mechanism, supports the Lindahl allocation as a Nash equilibrium allocation. The geometric framework of the Kolm triangle is employed to illustrate the workings of the mechanism and provide intuition for the main results.

Suggested Citation

  • Matt Van Essen, 2015. "Bartering Games in the Kolm Triangle," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(3), pages 297-310, June.
    • Handle: RePEc:bla:jpbect:v:17:y:2015:i:3:p:297-310
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    File URL: http://hdl.handle.net/10.1111/jpet.12101
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    References listed on IDEAS

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    1. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April.
    2. Van Essen, Matthew & Lazzati, Natalia & Walker, Mark, 2012. "Out-of-equilibrium performance of three Lindahl mechanisms: Experimental evidence," Games and Economic Behavior, Elsevier, vol. 74(1), pages 366-381.
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    4. Guoqiang Tian, 1989. "Implementation of the Lindahl Correspondence by a Single-Valued, Feasible, and Continuous Mechanism," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 56(4), pages 613-621.
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    6. repec:bla:jpbect:v:1:y:1999:i:1:p:139-76 is not listed on IDEAS
    7. Yan Chen & Fang-Fang Tang, 1998. "Learning and Incentive-Compatible Mechanisms for Public Goods Provision: An Experimental Study," Journal of Political Economy, University of Chicago Press, vol. 106(3), pages 633-662, June.
    8. Healy, Paul J., 2006. "Learning dynamics for mechanism design: An experimental comparison of public goods mechanisms," Journal of Economic Theory, Elsevier, vol. 129(1), pages 114-149, July.
    9. Kim, Taesung, 1993. "A stable Nash mechanism implementing Lindahl allocations for quasi-linear environments," Journal of Mathematical Economics, Elsevier, vol. 22(4), pages 359-371.
    10. Walker, Mark, 1981. "A Simple Incentive Compatible Scheme for Attaining Lindahl Allocations," Econometrica, Econometric Society, vol. 49(1), pages 65-71, January.
    11. Foley, Duncan K, 1970. "Lindahl's Solution and the Core of an Economy with Public Goods," Econometrica, Econometric Society, vol. 38(1), pages 66-72, January.
    12. William Thomson, 1999. "Economies with Public Goods: An Elementary Geometric Exposition," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 1(1), pages 139-176, January.
    13. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
    14. , J. & ,, 2012. "Designing stable mechanisms for economic environments," Theoretical Economics, Econometric Society, vol. 7(3), September.
    15. Matt Van Essen, 2012. "Information complexity, punishment, and stability in two Nash efficient Lindahl mechanisms," Review of Economic Design, Springer;Society for Economic Design, vol. 16(1), pages 15-40, March.
    16. Yan Chen, 2002. "A family of supermodular Nash mechanisms implementing Lindahl allocations," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 19(4), pages 773-790.
    17. Matthew J. Essen, 2013. "A Simple Supermodular Mechanism that Implements Lindahl Allocations," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 15(3), pages 363-377, June.
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    Cited by:

    1. Wolfgang Buchholz & Richard Cornes & Dirk Rübbelke, 2020. "Matching in the Kolm triangle: interiority and participation constraints of matching equilibria," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 47(5), pages 1039-1050, April.
    2. Van Essen, Matthew & Walker, Mark, 2017. "A simple market-like allocation mechanism for public goods," Games and Economic Behavior, Elsevier, vol. 101(C), pages 6-19.

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