The Groves-Ledyard mechanism: An experimental study of institutional design

• 成果类型: Article
• 署名作者: Chen, Y; Plott, CR
• 署名单位: California Institute of Technology; University of Michigan System; University of Michigan
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/0047-2727(95)01506-X
• 发表日期: 1996
• 页码: 335-364
• 关键词: Public goods; mechanisms; DESIGN

摘要

The Groves-Ledyard mechanism theoretically can solve the 'free-rider' problem in public good provision in certain environments. Two questions are of overriding importance in implementing the mechanism. The first is related to the actual performance of the mechanism in general. The second is the choice of a 'punishment parameter', gamma, which is the only parameter that is available for those who may want to actually use the mechanism. Thus the determination of the role of this variable on mechanism performance is fundamental for any advances along the lines of actual implementation. In studying the Groves-Ledyard mechanism, we show that the punishment parameter, gamma, plays a crucial role in the performance of the mechanism. By using gamma = 1 and 100, we show that under the higher punishment parameter, the Groves-Ledyard equilibrium is chosen much more frequently; a higher level of the public good is provided and efficiency is higher. By examining two behavioral models, we show that a higher gamma leads to an increase in the probability of an individual choosing a best response predicted by the model. The parameter gamma alone explains nearly 70% of the data in both the Cournot and the Carlson-Auster behavioral model. We also found that convergence to Cournot behavior is faster and more stable under a high gamma than under a low gamma.