The pivotal mechanism versus the voluntary contribution mechanism: an experimental comparison

We conduct an experimental comparison of two well-known mechanisms for undertaking a binary public project: the pivotal mechanism and the voluntary contribution mechanism. We compare the two mechanisms under complete information in which each subject knows the other subjects’ payoffs. We then observ...

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Bibliographic Details
Published inSocial choice and welfare Vol. 58; no. 3; pp. 429 - 505
Main Authors Homma, Tatsuki, Iba, Ryosuke, Shen, Junyi, Wakayama, Takuma, Yamamura, Hirofumi, Yamato, Takehiko
Format Journal Article
LanguageEnglish
Published Berlin/Heidelberg Springer Berlin Heidelberg 01.04.2022
Springer Nature B.V
Subjects
Economic Theory/Quantitative Economics/Mathematical Methods
Economics
Economics and Finance
Efficiency
Equilibrium
Game Theory
International Political Economy
Original Paper
Public Finance
Public good
Rationality
Social and Behav. Sciences
Social Policy
Voluntary
Online AccessGet full text
ISSN0176-1714
1432-217X
DOI10.1007/s00355-021-01350-x

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Summary:We conduct an experimental comparison of two well-known mechanisms for undertaking a binary public project: the pivotal mechanism and the voluntary contribution mechanism. We compare the two mechanisms under complete information in which each subject knows the other subjects’ payoffs. We then observe that the voluntary contribution mechanism works better than the pivotal mechanism from the perspectives of Pareto efficiency, individual rationality, and surplus maximization. On the other hand, there is no significant difference between the two mechanisms in terms of decision efficiency. These results suggest that the voluntary contribution mechanism is more favorable than the pivotal mechanism in practical applications.
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ISSN:0176-1714
1432-217X
DOI:10.1007/s00355-021-01350-x