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Information complexity, punishment, and stability in two Nash efficient Lindahl mechanisms

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Abstract

Earlier experimental work on public good mechanisms has focused almost exclusively on stability issues, finding that institutions with robust equilibrium stability properties were better at achieving their equilibrium. In this study, we continue to explore this insight and, in addition, look at issues such as out-of-equilibrium punishment and complexity. The experiment varies stability conditions and group size in two Nash efficient Lindahl mechanisms. These mechanisms have similar stability properties. However, when groups are large, they differ both in the severity with which they punish out-of-equilibrium behavior and their informational complexity. We examine how these differences impact mechanism performance.

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Authors and Affiliations

  1. Department of Economics, Finance, and Legal Studies, University of Alabama, Tuscaloosa, AL, USA

    Matt Van Essen

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  1. Matt Van Essen
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Correspondence to Matt Van Essen.

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Van Essen, M. Information complexity, punishment, and stability in two Nash efficient Lindahl mechanisms. Rev Econ Design 16, 15–40 (2012). https://doi.org/10.1007/s10058-011-0112-4

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  • DOI: https://doi.org/10.1007/s10058-011-0112-4

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