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Optimal mechanisms for siting noxious facilities

Author

Listed:
  • Denis Lescop

    (CRESE - Centre de REcherches sur les Stratégies Economiques (UR 3190) - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE])

Abstract

We study Bayesian mechanism design in the context of the siting of noxious facilities. Under incomplete information, we characterize optimal mechanisms facilitating the siting and cost sharing of the facility. These mechanisms are allocatively and Pareto efficient. However, it appears that transfers occur when the good is not provided. This result is due to the weakening of the incentive notion to Bayesian-Nash equilibrium and to the balanced budget condition. This phenomenon disappears if the setting is perfectly symmetric.

Suggested Citation

  • Denis Lescop, 2007. "Optimal mechanisms for siting noxious facilities," Post-Print hal-02549668, HAL.
    • Handle: RePEc:hal:journl:hal-02549668
    DOI: 10.1007/s10058-006-0018-8
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    Citations

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    Cited by:

    1. Bossert, Walter & Peters, Hans, 2014. "Single-basined choice," Journal of Mathematical Economics, Elsevier, vol. 52(C), pages 162-168.
    2. Amitrajeet Batabyal & Hamid Beladi, 2012. "A simple auction mechanism for locating noxious facilities," Letters in Spatial and Resource Sciences, Springer, vol. 5(1), pages 1-6, March.
    3. Laura Abrardi & Luca Colombo & Pier Angelo Mori, 2016. "Customer Ownership And Quality Provision In Public Services Under Asymmetric Information," Economic Inquiry, Western Economic Association International, vol. 54(3), pages 1499-1518, July.
    4. Martin Besfamille & Jean-Marie Lozachmeur, 2010. "NIMBY and mechanism design under different constitutional constraints," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 17(2), pages 114-132, April.
    5. Alberti, Federica & Mantilla, César, 2020. "Provision of noxious facilities using a market-like mechanism: A simple implementation in the lab," Working papers 35, Red Investigadores de Economía.
    6. Murat Öztürk & Hans Peters & Ton Storcken, 2014. "On the location of public bads: strategy-proofness under two-dimensional single-dipped preferences," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 56(1), pages 83-108, May.
    7. Abhinaba Lahiri & Ton Storcken, 2019. "Strategy-proof location of public bads in an interval," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 53(1), pages 49-62, June.
    8. Peters, Hans & Roy, Souvik & Sadhukhan, Soumyarup & Storcken, Ton, 2017. "An extreme point characterization of strategy-proof and unanimous probabilistic rules over binary restricted domains," Journal of Mathematical Economics, Elsevier, vol. 69(C), pages 84-90.
    9. Lahiri, Abhinaba & Peters, Hans & Storcken, Ton, 2017. "Strategy-proof location of public bads in a two-country model," Mathematical Social Sciences, Elsevier, vol. 90(C), pages 150-159.
    10. Rudy Santore, 2014. "Noxious Facilities, Environmental Damages, and Efficient Randomized Siting," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 57(1), pages 101-116, January.

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