Strategyproof Sharing of Submodular Costs: budget balance versus efficiency (1999)
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BibTeX
@ARTICLE{Moulin99strategyproofsharing,
author = {Hervé Moulin and Scott Shenker and Jel D and Stimulating Conversations Raj Deb and Bhaskar Dutta and Joan Feigenbaum and Wolfgang Pesendorfer},
title = {Strategyproof Sharing of Submodular Costs: budget balance versus efficiency},
journal = {},
year = {1999},
volume = {18},
pages = {511--533}
}
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Abstract
A service is produced for a set of agents. The service is binary, each agent either receives service or not, and the total cost of service is a submodular function of the set receiving service. We investigate strategyproof mechanisms that elicit individual willingness to pay, decide who is served, and then share the cost among them. If such a mechanism is budget balanced (covers cost exactly), it cannot be efficient (serve the surplus maximizing set of users) and vice-versa. We characterize the rich family of budget balanced and group strategyproof mechanisms; they correspond to the family of cost sharing formulae where an agent's cost share does not decrease when the set of users expand. The mechanism associated with the Shapley value cost sharing formula is characterized by the property that its worst welfare loss is minimal. When we require efficiency rather than budget balance -- the more common route in the literature -- we find that there is a single Clarke-Groves mech...
