Generalized Groves-Ledyard mechanisms. (English) Zbl 1393.91065
Summary: T. Groves and J. Ledyard [Econometrica 45, 783–809 (1977; Zbl 0363.90015)] construct a mechanism for public goods procurement that can be viewed as a direct-revelation Groves mechanism in which agents announce a parameter of a quadratic approximation of their true preferences. The mechanism’s Nash equilibrium outcomes are efficient. The budget is balanced because Groves mechanisms are balanced for the announced quadratic preferences. G. Tian [Econ. Lett. 53, No. 1, 17–24 (1996; Zbl 0900.90008)] subsequently discovered a richer set of budget-balancing preferences. We replicate the Groves-Ledyard construction using this expanded set of preferences, and uncover a new set of complex mechanisms that generalize the original Groves-Ledyard mechanism. The original mechanism, however, remains the most appealing in terms of both simplicity and stability.
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