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A Clarke tax tâtonnement that converges to the Lindahl allocation

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Abstract

This paper uses the Clarke mechanism to construct an incentive compatible t âtonnement process which converges to the Lindahl allocation of a stylized public good economy when consumers have quadratic preferences. We show truth-telling to be an ex-post perfect equilibrium in the infinite horizon game induced by the tâtonnement. Copyright Springer-Verlag Berlin Heidelberg 2014

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  • Matt Essen, 2014. "A Clarke tax tâtonnement that converges to the Lindahl allocation," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(2), pages 309-327, August.
    • Handle: RePEc:spr:sochwe:v:43:y:2014:i:2:p:309-327
    DOI: 10.1007/s00355-013-0781-8
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    2. Rob, Rafael, 1982. "Asymptotic efficiency of the demand revealing mechanism," Journal of Economic Theory, Elsevier, vol. 28(2), pages 207-220, December.
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    4. Pivato, Marcus, 2011. "A fair pivotal mechanism for nonpecuniary public goods," MPRA Paper 34525, University Library of Munich, Germany.
    5. 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.
    6. Edward Clarke, 1971. "Multipart pricing of public goods," Public Choice, Springer, vol. 11(1), pages 17-33, September.
    7. Van Essen, Matthew J., 2008. "A Simple Supermodular Mechanism that Implements Lindahl Allocations," MPRA Paper 12781, University Library of Munich, Germany.
    8. L. Hurwicz, 1979. "Outcome Functions Yielding Walrasian and Lindahl Allocations at Nash Equilibrium Points," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 46(2), pages 217-225.
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    17. Milgrom,Paul, 2004. "Putting Auction Theory to Work," Cambridge Books, Cambridge University Press, number 9780521536721, October.
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    More about this item

    Keywords

    C72; D44; H41;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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