Werner Gueth on Public projects benefiting some and harming others: evidence from three experimental studies

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.

Programme Director
Maria Vittoria Levati

Publication date
March 26, 2012