Strategy-proof cost sharing under increasing returns: Improvement of the supremal welfare loss

We consider a mechanism design problem in economies with increasing returns. We construct a new class of rules, called w-hybrid rules, and characterize them by strategy-proofness, anonymity, envy-freeness, consumer sovereignty, and non-bossiness. We show that w-hybrid rules improve the supremal welfare loss compared with the average cost pricing rule (Moulin, 1999 and Moulin and Shenker, 2001).

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Year of publication:	2015
Authors:	Hashimoto, Kazuhiko ; Saitoh, Hiroki
Published in:	Games and Economic Behavior. - Elsevier, ISSN 0899-8256. - Vol. 89.2015, C, p. 101-121
Publisher:	Elsevier
Subject:	Strategy-proofness \| Cost sharing \| Increasing returns \| Supremal welfare loss \| Average cost pricing \| Hybrid rule

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Type of publication:	Article
Classification:	D71 - Social Choice; Clubs; Committees; Associations ; D78 - Positive Analysis of Policy-Making and Implementation
Source:	RePEc - Research Papers in Economics

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