a condition guaranteeing that the nash allocation is walrasian abstract consider the set of net trades attainable by an economic agent when he varies his strategy and all other agents stick to their strategies if all attainable sets for all agents are star shaped with respect to the origin then every pareto efficient nash allocation is walrasian this result bears upon the question whether it is possible to implement redistributive goals without impairing efficiency

monetary policy coordination under fixed and floating exchange rates this paper studies monetary policy coordination in a familiar fixed price perfect capital mobility multicountry model it is shown that under fixed exchange rates countries can coordinate their policies and reach pareto efficient outcomes with rules closely related to the nash based mechanisms that have been designed to overcome free riding in standard public good economies the coordination rules defined in this paper do not make countries lose the control of their own policies it is also shown that nash implementation of pareto efficient states with similar rules is in general not possible under floating exchange rates copyright 1990 by royal economic society

wind power development in sweden global policies and local obstacles abstract recently the swedish government adopted a national planning goal of a yearly wind power generation of 10 twh by 2015 implying a substantial increase from the current 0 6 twh level in this paper we provide an economic assessment of the potential for future wind power investments in sweden in close conjunction with an analysis of the legal attitudinal and policy related uncertainties that face a wind mill investor it is shown that the economics of swedish wind power is negatively affected by a the lack of policy stability b public criticism at the local level and in particular c the legal provisions governing the assessment of the environmental impacts of wind mills and the planning procedures for mill location while national and global energy policies as well as the general public point out wind power as particularly environmentally friendly most of the objections to its expansion at the local level tend to have environmental origins the interests of those who object to wind mill installations gain strong legal protection and the municipal territorial planning monopoly in sweden implies that it is hard to make national energy policy goals heard at the local implementation stage compared to its competitors wind power is the technology that tends to have the most to loose from the risk and uncertainties created by this investment environment the paper identifies and discusses a number of ways in which the national policy interests could be strengthened at the local level we discuss the role of citizen participation as well as solutions within the realms of the legal system moreover since the diffusion of wind power encounters the most strident legal and attitudinal obstacles where it interferes with competing land uses a move offshore appears to be an efficient strategy from the perspective of a wind mill investor a stronger political commitment to wind power expansion in legal provisions as well as in the form of long run stability in policy instrument implementation will probably be necessary to attain the 2015 policy goal

empirical indication of economic long waves in aggregate production abstract two series of data covering more than 160 years of danish economic history are investigated by means of spectral analysis and transfer function identification the results give evidence to the existence of a 50 60 year long wave in aggregate production to obtain stationarity a logarithmic transformation of the data must be followed by elimination of a second order polynomial trend this indicates that the economic development in average has been faster than exponential and points to the significance of higher order positive feedback mechanisms peaks of gross domestic product gdp in current prices are found to lag peaks of gdp in fixed prices by typically 10 years this implies that the inflationary pressure generated during the final stages of an upswing continues for about 10 years into the subsequent stagnation period

dynamic implementation in two agent economies abstract the dynamic mechanisms that implement pareto efficient and individually rational allocations in standard public good economies suppose that agents communicate by exchanging as messages their marginal rates of substitution in some familiar models such as economies with non monotonic preferences marginal rates of substitution are not well defined or do not characterize preferences and therefore cannot play the role of communication messages we define a dynamic mechanism that implements pareto efficient and individually rational allocations in a general two agent economy

the impossibility of efficient decision rules for firms in competitive stock market economies considerable attention has been focused recently on models of firms under uncertainty in which there is an incomplete set of securities markets in these models each firm can issue only one security and consumers can generate consumption plans only through the purchase of firms securities consequently if the economy is competitive each stockholder of a firm will impute the same value to the firm in equilibrium where this value is given by the market price of the firm s security however stockholders will not in general have the same implicit prices for state contingent consumption since the financial market is said to be incomplete if the number of independent securities is less than the number of states of nature consumers cannot hedge perfectly whichimplies that unconstrained pareto optimal allocations are not generally attainable see 2 and 3 finally it is unclear what firms objectives should be in these models because profit maximization is not well defined firms profits in different states cannot be aggregated into a single index it is still generally accepted however that firms should operate in their own stockholders interests a necessary condition for allocative efficiency

a simple auctioneerless mechanism with walrasian properties abstract a simple mechanism for reallocating holdings is described in which no auctioneer is required outcomes are determined solely from traders actions and without any requirement that the mechanism be in equilibrium the mechanism is shown to exactly duplicate the performance of the walrasian auctioneer both in its equilibria and in its disequilibrium path if individuals are price takers and if the number of individuals is large to approximately duplicate the auctioneer s performance even when individuals behave strategically each taking account of his own influence on prices

learning dynamics for mechanism design an experimental comparison of public goods mechanisms in a repeated interaction public goods economy incomplete information and dynamic behavior may affect the realized outcomes of mechanisms known to be efficient in a complete information oneshot game an experimental test of five public goods mechanisms indicates that subjects with private information appear to best respond to recent observations this provides predictions about which mechanisms will generate convergence to their efficient equilibrium allocations these predictions match the experimental result that globally stable efficient mechanisms realize the highest efficiency in practice the simplicity of the suggested best response model makes it useful in predicting stability of mechanisms not yet tested

private versus public production of information abstract this paper re examines a recent article by grossman and stiglitz 1980 where information production is shown to be fundamentally incompatible with decentralized market systems based upon their model public production of information is discussed as a natural alternative three main implications of the analysis are i the market can be informationally efficient with public production of information ii there exists an informational equilibrium and the resulting allocation is pareto efficient and iii although the optimal level of information critically depends upon information users preferences and endowments their complete knowledge t the societal level is not necessary for public production of information

continuous and feasible implementation of rational expectations lindahl allocations abstract in this paper we consider bayesian implementation of rational expectations lindahl allocations for economic environments with public goods when agents are incompletely informed about environments we construct a continuous and feasible mechanism whose bayesian equilibrium allocations coincide with rational expectations lindahl allocations we not only allow the types of individuals to be unknown but also allow both the preferences and the initial endowments to be unknown to the designer in addition we allow some types of boundary equilibrium allocations and a continuous information structure journal of economic literatureclassification number c72 d71 d82 h41

a behavioral model of the economic long wave abstract this paper presents a simple model of the economic long wave the model is based on the system dynamics national model since 1975 the national model has provided an increasingly rich theory of the economic long wave the theory relates capital investment employment and workforce participation monetary and fiscal policy inflation productivity and innovation and even political values the model presented here focuses on capital investment the structure of the model is shown to be consistent with the principles of bounded rationality the behavior of the model is analyzed and capital self ordering is shown to be sufficient to generate long waves the model complements the national model by providing a representation of the dynamic hypothesis that is amenable to formal analysis and is easily extended to include other important mechanisms that may influence the nature of the long wave

out of equilibrium performance of three lindahl mechanisms experimental evidence 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 chen s mechanism which is supermodular converges closest and most rapidly to its equilibrium however we find that the properties that move subjects toward equilibrium in chen s 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

equilibrium binding agreements abstract we study equilibrium binding agreements the coalition structures that form under such agreements and the efficiency of the outcomes that result we analyze such agreements in a context where the payoff to each player depends on the actions of all other players thus a game in strategic form is a natural starting point unlike the device of a characteristic function explicit attention is paid to the behavior of the complementary set of players when a coalition blocks a proposed agreement a solution concept and its applications are discussed journal of economic literature classification numbers c70 c71

surplus sharing with a two stage mechanism in this article we consider environments where agents jointly produce a private output good by contributing privately owned resources an efficient outcome may not be realized due to strategic behavior and conflicting interests of the agents we construct a two stage mechanism building on a varian mechanism the modified mechanism ensures an equilibrium for a large class of preferences and guarantees the feasibility of outcomes

non excludable public good experiments we conduct a two stage game experiment with a non excludable public good in the first stage two subjects choose simultaneously whether or not they commit to contributing nothing to provide a pure public good in the second stage knowing the other subject s commitment decision subjects who did not commit in the first stage choose contributions to the public good we found no support for the evolutionary stable strategy equilibrium and the ratio of subjects who did not commit to contributing nothing increased as periods advanced that is the free riding rate declined over time furthermore this behavior did not arise due to altruism or kindness among subjects but from spiteful behavior of subjects

a voluntary participation game with a non excludable public good faculty of economics tokyo metropolitan university hachioji tokyo 192 0397 japanyamato takehiko c metro u ac jpreceived november 14 1997 revised august 21 1998in the previous mechanism design on public goods it was implicitly assumed thatevery agent must participate in the mechanism that the designer provides thisapproach neglects non excludability of public goods we explicitly incorporatenon excludability and examine a two stage game with voluntary participation inthe first stage each agent simultaneously decides whether she participates in themechanism or not and in the second stage knowing the other agents participationdecisions the agents who selected participation in the first stage choose theirstrategies participation of all agents is not an equilibrium in many situations journal of economic literature classification numbers c72 d71 d78 h41

ratio lindahl equilibria and an informationally efficient and implementable mixed ownership system abstract in this paper we formalize an informationally efficient and implementable mixed ownership economic institutional framework by using the ratio lindahl equilibrium that yields pareto efficient and individually rational allocations for public goods economies with general variable returns we consider the incentive aspects of the system by giving an incentive compatible informationally efficient and privacy preserving mechanism whose nash allocations coincide with ratio lindahl allocations moreover the mechanism is well behaved in the sense that it uses an individually feasible balanced and continuous outcome function and further has a message space of minimal dimension

norms and economic motivation in the swedish green electricity market abstract the purpose of this paper is to provide an econometric analysis of the most important determinants of swedish households choice to pay a price premium for green electricity we draw on recent developments in the literature on integrating norm motivated behavior into neoclassical consumer theory and assume that individuals have a preference for keeping a self image as a morally responsible person consumer behavior in the green market place will then be heavily determined by how purchases of different goods affect this self image the analysis is based on postal survey responses from 655 swedish households which are analyzed within a binary choice econometric framework the results indicate that the impact of choosing green on the household budget largely influences the choice between green and brown electricity as does the degree of perceived personal responsibility for the issue and the felt ability to affect the outcome in a positive way we find limited support for the notion that perceptions about others behavior in general affect individual moral norms and ultimately expressed behavior but this is also complemented by the influence of explicit social influence the difficulty in observing others purchases makes it however difficult to distinguish between social and moral norms in the case of green electricity

stable implementation of lindahl allocations abstract the resource allocation mechanisms using nash equilibrium as the solution concept in economies with incomplete information rely on the assumption that agent s disequilibrium messages converge to a nash equilibrium the mechanisms implementing lindahl allocations are however extremely unstable under the most used process to represent disequilibrium behaviour in games of incomplete information the cournot process we provide a new mechanism overcoming the instability difficulty in the case of quasi linear preferences

electricity from a competitive market in life cycle analysis abstract we propose that data from specific contracted electricity production plants should be used for electricity consumption in life cycle analysis when electricity is purchased from a competitive market electricity may thereby contribute less to the sum of environmental load than when data of marginal or average plants are used by this method the potential of electricity supplied through the grid to be a part of ambitious industrial environmental policy is made visible as shown on the swedish market a demand for deliveries from environmentally preferable plants can introduce price differences between different types of production thereby promoting investments in improved environmental performance of electricity production

economies with public projects efficiency and decentralization the article deals with the two fundamental theorems of welfare economics for production economies with a finite set of agents infinitely many private goods and a set of public projects the problem of efficiency and decentralization is addressed under the following very general assumptions a the commodity price duality is endowed with a consistent locally convex topology b the set of public projects is without any mathematical structure moreover any agent is characterized by a nonordered preference relation depending on consumption goods and public projects approximate and exact welfare theorems are discussed throughout the article

complexity and economic policy a paradigm shift or a change in perspective a review essay on david colander and roland kupers s complexity and the art of public policy in their recent book colander and kupers 2014 argue that viewing the economy as a complex adaptive system should change the way in which we make economic policy this would necessitate a paradigm shift economics has over time tried to produce a coherent model to underpin the dominant laissez faire liberal approach but we have never proved in that model that left to their own devices the participants in an economy will self organize into a satisfactory state this is an assumption complex interactive systems with direct interaction between heterogeneous agents may show no tendency to self equilibrate and will undergo endogenous crises economists should concentrate on the emergence of certain patterns colander and kupers suggest that we may be able to nudge the system into good basins of attraction a more radical view is that there are no fixed basins of attraction these change with the evolution of the system and it is illusory to believe that we can choose good basins we may be able to recognize and influence the emergence of certain states of the economy but we are far from leon walras s dream of economics as a science like astrophysics

evolutionary implementation and congestion pricing we consider an implementation problem faced by a planner who manages a roadway network the problem entails both hidden information and hidden actions we solve the planner s problem by introducing a new class of mechanisms and a new notion of implementation the mechanisms called price schemes attach transfers to the available routes they do not involve direct revelation the method of implementation is evolutionary requiring that players who follow any reasonable myopic adjustment process eventually learn to behave as the planner desires we show that efficient behaviour can be guaranteed using simple decentralized price schemes

lindahl mechanisms and free riders several authors have proposed mechanisms whose nash equilibria yield lindahl tax allocations however as is well known so does the lindahl procedure with an auctioneer moreover the game forms of all these mechanisms and of any as yet undiscovered such mechanism all have the same normal form as does the lindahl procedure without an auctioneer the manipulative nash equilibria are consequently the same for all these mechanisms so that all have the traditional free rider problem and all have the same outcome under strategic behavior

implementation of lindahl allocations with nontotal nontransitive preferences abstract the purpose of this paper is to present a mechanism the nash allocations of which coincide with the lindahl allocations even when preferences are nontransitive or nontotal this extension to include nontotal nontransitive preferences is potentially very important since preferences of agents are nontransitive nontotal in many cases in particular in the case where the players are groups of individuals besides the mechanism presented here uses outcome functions that are individually feasible balanced not merely weakly balanced continuous differentiable around nash equilibria and furthermore almost everywhere differentiable moreover the mechanism has a message space of minimal dimension

myopic versus intertemporal manipulation in decentralized planning procedures manipulation is studied in abstract planning procedures in exchange economies with private goods and a generalization of the results of champsaur laroque 1980 is obtained when the nash equilibrium corresponding to myopic manipulation is unique the outcome of consistent intertemporal manipulation on a time interval 0 t is characterized it is shown that when t goes to infinity the exists a nash equilibrium only when the initial allocation is pareto optimal

a note on feasible implementations abstract this paper is concerned with the problem of individually feasible outcomes in decentralized allocation mechanisms we consider a well known mechanism which achieves efficient allocations in equilibrium this mechanism however may leave agents bankrupt if they fail to reach equilibrium it is shown that the bankruptcy problem can be avoided if a voting stage is added to the original mechanism

implementation of balanced linear cost share equilibrium solution in nash and strong nash equilibria abstract this paper considers the incentive aspect of the balanced linear cost share equilibrium blcse which yields an endogenous theory of profit distribution for public goods economies with convex production technologies we do so by presenting an incentive compatible mechanism which doubly implements the blcse solution in nash and strong nash equilibria so that nash allocations and strong nash allocations coincide with blcse allocations the mechanism presented here allows not only preferences and initial endowments but also coalition patterns to be privately observed in addition it works not only for three or more agents but also for two agent economies

on the existence of optimal truth dominant mechanisms abstract the existence of optimal dominant strategy mechanisms has been shown only for quadratic valuation functions this paper shows that non trivial pareto efficient and truth dominant mechanisms exist for a slightly larger set of valuation functions

generalized groves ledyard mechanisms abstract groves and ledyard 1977 construct a mechanism for public goods procurement that can be viewed as a direct revelation groves mechanism in which agents announce a parameter of a quadratic approximation of their true preferences the mechanism s nash equilibrium outcomes are efficient the budget is balanced because groves mechanisms are balanced for the announced quadratic preferences tian 1996 subsequently discovered a richer set of budget balancing preferences we replicate the groves ledyard construction using this expanded set of preferences and uncover a new set of complex mechanisms that generalize the original groves ledyard mechanism the original mechanism however remains the most appealing in terms of both simplicity and stability

subgame perfect implementation of bargaining solutions abstract this paper provides simple four stage game forms that fully implement a large class of two person bargaining solutions in subgame perfect equilibrium the solutions that can be implemented by our game forms are those that maximize a monotonic and quasi concave function of utilities after normalizing each agent s utility function so that the maximum utility is 1 and the utility of the disagreement outcome is 0 this class of solutions includes the nash kalai smorodinsky and relative utilitarian solutions the game forms have a structure of alternating offers and contain no integer device

stuck between a roc and a hard place barriers to the take up of green energy in the uk abstract this paper examines the uk mechanisms for ensuring future investment in renewable energy through consumer adoption of green energy tariffs and the renewable obligation certificate roc system using a national survey and focus groups the stated willingness by uk customers to pay a premium for renewable or green energy and actual take up of such tariffs is assessed substantial differences between willingness to pay for and the adoption of green energy tariffs are reported this disparity is linked to a range of factors including consumer confusion lack of supply complexities of constructing green source tariffs under the roc system and a lack of customer trust it is concluded that the re definition of the green energy market in favour of green source tariffs greater direct compliance with the renewable obligation by addressing supply constraints and efforts in providing clearer information and choices for consumers via a compulsory green energy accreditation scheme are required if willing consumers are to contribute to investment in renewable energy

long waves and economic growth a critical appraisal no one who has examined the dynamics of capitalist economies over long historical periods can doubt that they experience significant long term variations in their aggregate performance the question is whether these long term variations are more than the outcome of a summation of random events and further whether they exhibit recurrent temporal regularities that are sufficiently well behaved to call them long waves in recent years there has been a strong resurgence of interest in such long term movements since their existence could provide a coherent explanation for the poor performance of capitalist economies over the past decade we do not attempt herein to examine the historical evidence for long cycles we have in fact examined this evidence and find it unconvincing although historical data might conceivably lend some plausibility to the notion of long cycles in prices we remain at present sceptical of the case that has so far been made for their presence in real phenomena that is in aggregate output or employment what we offer here instead consistent with our present scepticism is an attempt to examine the economic logic of long waves more specifically we ask what conditions would need to be fulfilled in order for technological innovation to generate long cycles of the periodicity postulated by n d kondratiev and his disciples it is our view that such a theory which might account for the presence of long cycles in some real economic variable would have to fulfill a set of logically interdependent requirements we discuss these requirements under the four categories of causality timing economywide repercussions and recurrence 1 causality

decisions and optimality in competitive stock ownership economies reexamination of the decision theoretic structure of a diamond dreze stock market economy reveals that general lack of optimal equilibrium allocations is an informational problem prices of firms shares and observed production convey information sufficient for weak form market efficiency but is inadequate for investors to select socially optimal portfolios which constitute strong form market efficiency revising the optimality concept to accommodate information constraints yields a notion of information constrained pareto optimality this concept reflects general application of the principle of semistrong form market efficiency our approach subsumes the bayesian approach

sharing the cost of a public good an incentive constrained axiomatic approach we study the problem of provision and cost sharing of a public good in large economies where exclusion complete or partial is possible we search for incentive constrained efficient allocation rules that display fairness properties population monotonicity says that an increase in population should not be detrimental to anyone demand monotonicity states that an increase in the demand for the public good in the sense of a first order stochastic dominance shift in the distribution of preferences should not be detrimental to any agent whose preferences remain unchanged under suitable domain restrictions we give an explicit characterization of all incentive constrained efficient allocation rules we then show that there exists a unique incentive constrained efficient and demand monotonic allocation rule the so called serial rule in the binary public good case the serial rule is also the only incentive constrained efficient and population monotonic rule

instability in the implementation of walrasian allocations abstract the existence of game forms which implement walrasian allocations as cournot nash equilibrium outcomes is well known however if the equilibria are also required to be locally dynamically stable at least for environments with unique walrasian allocations this paper shows that the requisite game forms do not exist our definition of a game form entails certain regularity conditions and requires the cournot equilibrium to be unique when the walrasian equilibrium is unique the main result is that for such a game form there does not exist a continuous time strategy adjustment process which ensures the local stability of cournot equilibria throughout a certain class of environments having unique walrasian equilibria each trader adjusts his strategy in response to his own characteristics and the observed current strategies of others but the direction and magnitude of adjustments are not constrained by any behavioral assumptions the definitions permit the inclusion of an artificial player such as an auctioneer so the well known tatonnement instability emerges as a special case

experiments with the pivot process for providing public goods interest in demand revealing mechanisms for providing public goods has both waned and then renewed over the past two decades the possibility of using such mechanisms in different venues than originally anticipated sparked the research reported here the specific motivation for this paper is to conduct a series of simple direct tests of one version of the class of mechanisms failure of demand revelation was much more expensive than we had expected even when compared to previous research with related mechanisms the reason for this remains an open question

environmental labelling of electricity delivery contracts in sweden abstract competition in the electricity market allows customers to choose between suppliers as a consequence customers may demand electricity from specified sources of energy in sweden the swedish society for nature conservation ssnc operates a system of environmental labelling of electricity delivery contracts since 1996 labelling is available for suppliers offering electricity from renewable sources of energy with some additional criteria companies may acquire a licence to use the label by showing ability to deliver such electricity and by agreeing to be audited the system is private independent it is operating on the bases of credibility earned by the ssnc during 90 years as an environmental organisation and 10 years as operator of environmental labelling of consumer products the system is market oriented compatible with wto and eu market principles and independent of governmental environmental restrictions subsidy or quota systems it is relying on voluntary agreements the results are desirable if only a few by electricity under labelled contracts as well as if every customer do so the market is growing a majority of the suppliers have a license and may offer labelled contracts in the year 2000 7 of all electricity sold to final consumers was sold under labelled contracts

technical economic succession and the economic long wave abstract we have developed a formal model of the economic long wave based upon gerhard mensch s process of metamorphosis the alternating phases of economic expansion and stagnation are here considered to arise from the succession of technical economic cultures each characterized by its own infrastructure leading industrial sectors typical production methods and main products a purpose of the model is thus to show how randomly distributed discoveries can be bunched into waves of innovations with a relatively well defined period of 50 60 years the economic long wave is pictured as a series of unstable transitions by which random attempts to introduce new techniques through amplification and diffusion qualitatively change the society as a whole it is shown how the 50 60 years period is related to the maximum rate of economic growth for evolving new industries as well as to the intensity of random attempts at the microlevel to adopt new techniques in our model the economic system has no equilibrium point to oscillate around as long as new discoveries are made the potential for economic activities continues to grow it is assumed however that the general economic conditions control the penetration processes such that basic new innovations are more difficult to introduce in periods of rapid growth than in periods of economic stagnation

implementing the efficient allocation of pollution we provide simple mechanisms to implement the efficient allocation of pollution first assuming complete information across firms and then allowing for incomplete information both mechanisms operate by inducing firms to monitor one another using firms reports to determine pollution allotments and transfers the complete information mechanism determines a firm s transfer according to a linear pollution price set by other firms both mechanisms can be modified to be budget balanced in and out of equilibrium the complete information mechanism implements the efficient allocation even when firms are allowed to use mixed strategies under a single crossing condition the same holds for the incomplete information mechanism this abstract was borrowed from another version of this item

a mechanism for the allocation of corporate investment corporate investment in an economy without a complete set of contingent claims markets has the characteristic of a public good in the sense that the stockholders consumption planscannot be separated from but depend on the specific investment plans of the firms dreze 4 has shown that a constrained pareto optimal cpo allocation of investment in a stock market economy must satisfy a generalization of the samuelson 24 condition for efficient production of public goods the investment plan should maximize a weighted sum of the stockholders personal valuations of future output minus current input cost however except for those special cases in which cpo investment plans are unanimously supported by stockholders see 17 20 and 2 the theory of the firm in incomplete markets lacks a suitable maximization criterion although the dreze samuelson condition is a most appealing candidate it is not unanimously preferred by stockholders each of whom prefers that his or her own valuation of future output receives all the weight in the investment decision furthermore the application of the dreze samuelson condition depends on the correct revelation of stockholders preferences which in the absence of special inducements cannot be expected from economic agents

a note on allocations attainable through nash equilibria abstract this note reexamines the issue of attaining efficient resource allocations as noncooperative equilibria of a strategic game contrary to the spirit of earlier work on this subject it is shown that there is an entire class of choice rules aside from the walrasian one which are implementable in nash equilibrium stategies

an experiment on nash implementation we perform an experimental test of a modification of the controversial canonical mechanism for nash implementation using three subjects in non repeated groups as well as three outcomes states of nature and integer choices we find that this mechanism successfully implements the desired outcome a large majority of the time providing empirical evidence for the feasibility of such implementation in addition the performance is further improved by imposing a fine on a dissident so that the mechanism implements strict nash equilibria while our environment is stylized our results offer hope that experiments can identify reasonable features for practical implementation mechanisms

stability of the groves and ledyard mechanism abstract it is shown that the nash equilibria of the game defined by the groves and ledyard mechanism in a public good economy can be made locally stable under cournot best replay behavior and general assumptions on preferneces

from a bundled energy capacity pricing model to an energy capacity ancillary services pricing model in this paper we extend the chilean power generation pricing mechanism with capacity and energy payments to one where ancillary services as as frequency regulation and voltage control are explicitly recognized adequacy and security attributes of the electric system and the public good characteristics of as are set within the payment structure to distribute the financing of as among those who benefit from their provision the contribution to finance the provision of as is determined assessing the value assigned to the system security by each agent following what s an efficient pricing mechanism in the presence of public goods