Prior-free cost sharing design: group strategyproofness and the worst absolute loss

Conference paper

A service is produced for a set of agents at some cost. The service is binary, each agent either receives service or not. A mechanism elicits the willingness to pay of the agents for getting service, serves a group of agents and covers the cost by charging those agents. We consider the problem in which the designer of the mechanism has little information about the participants to be able to form a prior-belief about the distribution of their possible types. This paper investigates mechanisms that meet two robust properties that are meaningful in this setting. On one hand, we look at mechanisms that prevent coordination between any group of agents (henceforth called group strategyproof). On the other hand, we look at mechanisms that are optimal using the worst absolute surplus loss measure. The mechanisms that are optimal and group strategyproof are characterized for different shapes of cost functions.

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Copyright information

© Springer-Verlag US 2009

Authors and Affiliations

  1. 1.Economics DepartmentUniversity of HawaiiHonolulu

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