In this paper, I justify neutral mechanisms as the reasonable solutions for public good provision and cost shares in public goods problems. I illustrate that neutral mechanisms can be easily computed by the tractable set of conditions with straightforward interpretations for a class of public goods problems. I show that, unlike neutral mechanisms, ex ante incentive efficient mechanisms are not robust to a perturbation of the information structure at the time of mechanism selection. I highlight several merits of using neutral mechanisms instead of interim incentive efficient mechanisms: Neutral mechanisms yield sharp predictions, are invulnerable to the possibility of information leakage during the selection process, and have the attractive properties of both efficiency and equity. I discuss implications for the analysis of ex ante and interim incentive efficient mechanisms for public goods problems.
|Issue number||4 April|
|Publication status||Published - 2022 Apr|
Bibliographical noteFunding Information:
Funding: This work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea (NRF-2021S1A5A806049011). The author also received partial funding for this work by the Yonsei University Future-Leading Research Initiative (Grant no. 2019-22-0187, 2020-22-0499, 2021-22-0294). The funders had no role in study design, analysis, decision to publish, and preparation of the manuscript.
Copyright: © 2022 Jin Yeub Kim. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
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