Utilitarian mechanism design for an excludable public good

Hellwig, Martin

doi:10.1007/s00199-009-0488-3

Cited by 3 publications

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References 25 publications

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“…In deference to Dupuit (1844), I will refer to this fee as the Dupuit fee and the associated admission rule as the Dupuit admission rule. Formally, the Dupuit fee is given as the smallest solution to the equation 12 (1 F ( )) = K: (6.5)…”

Section: Condition (64) Is Obviously Incompatible With the Open-admimentioning

confidence: 99%

Utilitarian Mechanism Design for an Excludable Public Good

Hellwig

2009

SSRN Journal

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This paper studies the design of optimal utilitarian mechanisms for an excludable public good. Excludability provides a basis for making people pay for admissions; the payments can be used for redistribution and/or funding. Whereas previous work assumed that admissions are governed by the payment or nonpayment of a price, this paper allows for arbitrary admission rules. With su¢ cient inequality aversion, nondegenerate randomization in admissions is shown to be desirable for certain model speci…cations, with and without participation constraints. The paper also gives a su¢ cient condition on the distribution of preferences under which randomization is undesirable.JEL Classi…cation: D61, D63, H21, H41

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Section: Condition (64) Is Obviously Incompatible With the Open-admimentioning

confidence: 99%

Utilitarian Mechanism Design for an Excludable Public Good

Hellwig

2009

SSRN Journal

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Club good intermediaries

Loertscher

Marx

2017

International Journal of Industrial Organization

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The emergence and ubiquitous presence in everyday life of digital goods such as songs, movies, and e-books give renewed salience to the problem of providing public goods with exclusion. Because digital goods are typically traded via intermediaries like iTunes, Amazon, and Netflix, the question arises as to the optimal pricing mechanism for such club good intermediaries. We derive the direct Bayesian optimal mechanism for allocating club goods when the mechanism designer is an intermediary that neither produces nor consumes the goods, and we develop an indirect mechanism that implements this mechanism. We also derive sufficient conditions for the intermediary-optimal mechanism to be implementable with revenue sharing contracts, which are widely used in e-business.

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