Which decision rule should we use to make a binary collective choice? While voting procedures are applied ubiquitously, they are criticized for being inefficient. Using monetary transfers, efficient choices can be made at the cost of a budget imbalance. Is it optimal to do so? And why are...

It is well-known that the ability of the Vickrey-Clarke-Groves (VCG) mechanism to implement efficient outcomes for private value choice problems does not extend to interdependent value problems. When an agent's type affects other agents' utilities, it may not be incentive compatible for him to...

We consider mechanism design in contexts in which agents exhibit bounded depth of reasoning (level k ) instead of rational expectations. We use simple direct mechanisms, in which agents report only first-order beliefs. While level 0 agents are assumed to be truth tellers, level k agents...

How should a group of people decide to allocate a task that has to be done but is not adequately rewarded? This paper finds an optimal mechanism for the private provision of a public service in an environment without monetary transfers. All members of the group have the same cost of providing...

We consider mechanism design in contexts in which agents exhibit bounded depth of reasoning (level k) instead of rational expectations. We use simple direct mechanisms, in which agents report only first-order beliefs. While level 0 agents are assumed to be truth tellers, level k agents...

How can we maximize the common good? This is a central organizing question of public policy design, across political parties and ideologies. The answer typically involves the provisioning of public goods such as fresh air, national defense, and knowledge. Public goods are costly to produce but...

The paper provides a specification of belief systems for models of large economies with anonymity in which aggregate states depend only on cross-section distributions of types. For belief systems satisfying certain conditions of mutual absolute continuity, the paper gives a necessary and...

Mechanisms for Nash implementation in the literature are fragile in the sense that they fail if just one or two players do not follow their equilibrium strategy. A mechanism is outcome-robust if its equilibrium outcome is not affected by any deviating minority of players. Is Nash implementation...

In a simplifying analytical framework with endogenous levels of actual and self-reported emissions, we consolidate the existing literature into three main hypotheses about the relative merits, for a resource-constrained regulator, of random (RAM) and competitive (CAM) audit mechanisms in the...