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Endogenous Community Formation and Collective Provision - A Procedurally Fair Mechanism -
Pictured person

Güth, Werner

published
Thu Mar 21 2013
Number of discussion paper

2013-013

keyword(s)

Collective action

Equality axiom

Mechanism design

Procedural fairness

Public provision

abstract

A group of actors, individuals or firms, can engage in collectively providing projects which may be costly or generating revenues and which may benefit some and harm others. Based on requirements of procedural fairness (Güth and Kliemt, 2013), we derive a bidding mechanism determining endogenously who participates in collective provision, which projects are implemented, and the positive or negative payments due to the participating members. We justify and discuss this procedural fairness approach and compare it with that of optimal, e.g. welfaristic game theoretic mechanism design (e.g. Myerson, 1979).

article pub. typess JER
Research article
article languages JER
Englisch
JEL-Classification for JER
D44 - Auctions ; D46 - Value Theory ; D61 - Allocative Efficiency; Cost–Benefit Analysis ; D62 - Externalities ; D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement ; D71 - Social Choice; Clubs; Committees; Associations ; D72 - Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior ; D73 - Bureaucracy; Administrative Processes in Public Organizations; Corruption ; D74 - Conflict; Conflict Resolution; Alliances