Speaker:
Werner Gueth
- Max Planck Institute of Economics, Jena, Strategic Interaction Group
Monday, May 14, 2012
at
1:00 PM
Aula C, Palazzo di Economia
Based on an axiomatically derived provision rule allowing community members to endogenously determine which, if any, public projects should be provided, we perform experiments where (i) not all parties benefit from provision, and (ii) the projects' "costs" can be negative. In the tradition of legal mechanism design, the proposed provision rule is widely applicable. Additionally, it relies on intuitive fairness and efficiency requirements. Our experiments demonstrate that the provision rule is conducive to efficiency despite its multiplicity of equilibria and underbidding incentives.
