Out-of-equilibrium performance of three Lindahl mechanisms: Experimental evidence

B-Tier
Journal: Games and Economic Behavior
Year: 2012
Volume: 74
Issue: 1
Pages: 366-381

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We describe an experimental comparison of the out-of-equilibrium performance of three allocation mechanisms designed to achieve Lindahl outcomes as Nash equilibria: the mechanisms due to Walker (1981), Kim (1993), and Chen (2002). We find that Chenʼs mechanism, which is supermodular, converges closest and most rapidly to its equilibrium. However, we find that the properties that move subjects toward equilibrium in Chenʼs mechanism typically generate sizeable taxes and subsidies when not in equilibrium, and correspondingly large budget surpluses and deficits, which typically far outweigh the surplus created by providing the public good. The Kim mechanism, on the other hand, converges relatively close to its equilibrium and exhibits much better out-of-equilibrium efficiency properties.

Technical Details

RePEc Handle
repec:eee:gamebe:v:74:y:2012:i:1:p:366-381
Journal Field
Theory
Author Count
3
Added to Database
2026-01-25