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Efficient collective decision-making, marginal cost pricing, and quadratic voting

Author

Listed:
  • Nicolaus Tideman

    (Virginia Polytechnic Institute and State University)

  • Florenz Plassmann

    (State University of New York at Binghamton)

Abstract

We discuss the mechanisms related to quadratic voting, from Vickrey’s counter-speculation mechanism and his second-price auction, through the family of Groves mechanisms and its most notable member, the Clarke mechanism, to the expected externality mechanism, Goeree and Zhang’s mechanism, the Groves–Ledyard mechanism, and the Hylland–Zeckhauser mechanism. We show that each mechanism that involves collective decisions has a quadratic aspect and that all of the mechanisms that we discuss are applications of the fundamental insight that for a process to be efficient, all parties involved must bear the marginal social costs of their actions.

Suggested Citation

  • Nicolaus Tideman & Florenz Plassmann, 2017. "Efficient collective decision-making, marginal cost pricing, and quadratic voting," Public Choice, Springer, vol. 172(1), pages 45-73, July.
    • Handle: RePEc:kap:pubcho:v:172:y:2017:i:1:d:10.1007_s11127-017-0411-6
    DOI: 10.1007/s11127-017-0411-6
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    References listed on IDEAS

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    Cited by:

    1. John C. Goodman & Philip K. Porter, 2021. "Will quadratic voting produce optimal public policy?," Public Choice, Springer, vol. 186(1), pages 141-148, January.
    2. Rickels, Wilfried & Quaas, Martin F. & Ricke, Katharine & Quaas, Johannes & Moreno-Cruz, Juan & Smulders, Sjak, 2020. "Who turns the global thermostat and by how much?," Energy Economics, Elsevier, vol. 91(C).
    3. Luis V. M. Freitas & Wilfredo L. Maldonado, 2021. "Quadratic Funding with Incomplete Information," Working Papers, Department of Economics 2021_24, University of São Paulo (FEA-USP).
    4. Nicolaus Tideman & Florenz Plassmann, 2017. "Efficient bilateral taxation of externalities," Public Choice, Springer, vol. 173(1), pages 109-130, October.
    5. Aperjis, Christina & Kotowski, Maciej & Zeckhauser, Richard, 2019. "Efficient Division When Preferences are Private: Using the Expected Externality Mechanism," Working Paper Series rwp19-014, Harvard University, John F. Kennedy School of Government.
    6. Darcy W. E. Allen & Chris Berg & Aaron M. Lane & Jason Potts, 2020. "Cryptodemocracy and its institutional possibilities," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 33(3), pages 363-374, September.
    7. Takeshi Kato & Yasuhiro Asa & Misa Owa, 2021. "Positionality-Weighted Aggregation Methods for Cumulative Voting," International Journal of Social Science Studies, Redfame publishing, vol. 9(2), pages 79-88, December.

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    More about this item

    Keywords

    Quadratic voting; Expected externality mechanism; Vickrey–Clarke–Groves mechanism; Groves–Ledyard mechanism; Hylland–Zeckhauser mechanism;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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