Publication Type

Working Paper

Version

publishedVersion

Publication Date

11-2018

Abstract

This paper characterizes mechanisms satisfying Bayesian incentive compatibility (BIC) and interim individual rationality (IIR) in the classical public good provision problem. Many papers in the literature obtain the results in the so-called standard model of ex ante identical agents with a continuous, closed interval of types. Although the standard model and more generally a continuum type space are widely used in the literature, it is nonetheless an abstraction of reality. Given that the public good provision problem has occupied a central application in the theory of mechanism design, we propose a "stress test" for the results in the standard model by subjecting them to a fi nite discretization over the standard model. The main contribution of this paper is that many of the known results gained within the standard continuum type space also hold when it is replaced by a discrete type space.

Keywords

Budget balance, decision efficiency, incentive compatibility, individual rationality; mechanisms; public goods

Discipline

Economics | Economic Theory

Research Areas

Economic Theory

First Page

1

Last Page

45

Publisher

SMU Economics and Statistics Working Paper Series, No. 21-2018

City or Country

Singapore

Copyright Owner and License

Authors

Share

COinS