Abstract.
An economy can produce and consume a fixed-cost excludable public good only if its members fully fund the cost of the good. In this paper, we characterize the entire class of mechanisms for the provision of the public good and its cost that are Pareto optimal among the set of strategy-proof, voluntarily-participatory, budget-balancing, non-bossy, and replacement-monotonic mechanisms. We demonstrate that this class of mechanisms is quite small and can be characterized as simple step-price mechanisms.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Author information
Authors and Affiliations
Corresponding author
Additional information
Received: 10 July 2001, Accepted: 5 February 2003,
JEL Classification:
C72, D71
This work was done while Dearden was visiting Center for Economic Research, Tilburg University, The Netherlands. He is thankful for their gracious hospitality. The authors thank the editors and reviewers for their thoughtful comments.
Rights and permissions
About this article
Cite this article
Dearden, J.A., Einolf, K. Strategy-proof allocation of fixed costs. Review Economic Design 8, 185–204 (2003) (2003). https://doi.org/10.1007/s10058-003-0095-x
Issue Date:
DOI: https://doi.org/10.1007/s10058-003-0095-x