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Published August 2005 | public
Journal Article

An experimental comparison of collective choice procedures for excludable public goods

Abstract

This paper compares three collective choice procedures for the provision of excludable public goods under incomplete information. One, serial cost sharing (SCS), is budget balanced, individually rational, anonymous and strategy proof. The other two are "hybrid" procedures: voluntary cost sharing with proportional rebates (PCS) and with no rebates (NR). PCS satisfies all these properties except strategy proofness, and NR satisfies all the properties except for strategy proofness and budget balance. However, PCS and NR do not exclude any potential users, and they do not require equal cost shares, thereby overcoming the two main sources of inefficiency with SCS. We characterize the Bayesian Nash equilibria (BNE) of the hybrid mechanisms and conduct laboratory experiments to compare the performance of the three mechanisms. We find that PCS produces significantly more efficient allocations than either SCS or NR.

Additional Information

© 2004 Elsevier. Received 13 March 2002; received in revised form 28 December 2002; accepted 23 April 2003. Available online 14 November 2004. We thank the National Science Foundation and the Social Science Experimental Laboratory at Caltech for financial support. We are grateful for helpful comments from Ray Battalio, Matthew Jackson, Richard McKelvey, seminar participants at Texas A&M University, Carnegie Mellon University and the University of Chicago, participants at the Fall 2000 meetings of the Economic Science Association and two anonymous referees. Thanks also to Serena Guarnaschelli, Elena Asparouhova and Vale Murthy for help running the experiments, and to Julie Malmquist and the Social Science Department at Pasadena City College for their help in recruiting subjects for the experiment.

Additional details

Created:
August 22, 2023
Modified:
October 17, 2023