Redistribution of VCG Payments in Public Project Problems

  • Victor Naroditskiy
  • Mingyu Guo
  • Lachlan Dufton
  • Maria Polukarov
  • Nicholas R. Jennings
Part of the Lecture Notes in Computer Science book series (LNCS, volume 7695)


Redistribution of VCG payments has been mostly studied in the context of resource allocation. This paper focuses on another fundamental model—the public project problem. In this scenario, the VCG mechanism collects in payments up to \(\frac{n-1}{n}\) of the total value of the agents. This collected revenue represents a loss of social welfare. Given this, we study how to redistribute most of the VCG revenue back to the agents. Our first result is a bound on the best possible efficiency ratio, which we conjecture to be tight based on numerical simulations. Furthermore, the upper bound is confirmed on the case with 3 agents, for which we derive an optimal redistribution function. For more than 3 agents, we turn to heuristic solutions and propose a new approach to designing redistribution mechanisms.


Social Welfare Public Good Provision Optimal Mechanism Rebate Function Redistribution Mechanism 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Springer-Verlag Berlin Heidelberg 2012

Authors and Affiliations

  • Victor Naroditskiy
    • 1
  • Mingyu Guo
    • 2
  • Lachlan Dufton
    • 3
  • Maria Polukarov
    • 1
  • Nicholas R. Jennings
    • 1
  1. 1.School of Electronics and Computer ScienceUniversity of SouthamptonUK
  2. 2.Computer Science DepartmentUniversity of LiverpoolUK
  3. 3.Cheriton School of Computer ScienceUniversity of WaterlooCanada

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