Equilibrium participation in public goods allocations
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We consider a notion of voluntary participation for mechanism design in public goods economies in which mechanisms select public goods allocations and individuals then choose whether or not to submit their requested transfer to the central planner. The set of allocations that are robust to non-participation is shown to be sub-optimal in a wide variety of environments and may shrink to the endowment as the economy is replicated. When agents become small as the economy becomes large, any non-trivial mechanism suffers from non-participation when agents cannot be coerced to contribute.
KeywordsPublic goods Mechanism design Voluntary participation
JEL ClassificationC62 C72 H41
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