Lindahl vs. Lindahl: Optimal siting and sizing of a noxious facility

Resultado de la investigación: Working paperDocumento de trabajo

Resumen

Providing a noxious facility poses two problems previously unexplored together: where to locate it and how large it should be. We propose a mechanism combining some market-like properties with a modified second-price auction. The mechanism selects a host, a facility size, a compensation for hosting the project, and determines how the compensation and building costs are split among the non-hosts. Regardless of the selected host, any equilibrium outcome of this mechanism is a Lindahl allocation. If each community bids truthfully for becoming the host–a strategy which no community has incentives to deviate–the selected Lindahl allocation is globally optimal.
Idioma originalInglés estadounidense
Páginas1-34
Número de páginas34
EstadoPublicada - oct. 2020

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