Efficient Collective Decision-Making, Marginal Cost Pricing, And Quadratic Voting

33 Pages Posted: 11 Sep 2016

See all articles by T. Nicolaus Tideman

T. Nicolaus Tideman

Virginia Polytechnic Institute & State University - Department of Economics

Florenz Plassmann

SUNY at Binghamton, Department of Economics

Date Written: August 25, 2016

Abstract

We trace the developments that led to quadratic voting, from Vickrey’s counterspeculation mechanism and his second-price auction through the family of Groves mechanisms and its most notable member, the Clarke mechanism, to the expected externality mechanism, the Groves-Ledyard mechanism, and the Hylland-Zeckhauser mechanism. We show that these mechanisms are all applications of the fundamental insight that for a process to be efficient, all parties involved must bear the marginal costs of their actions.

Keywords: Quadratic voting, Expected externality mechanism, Vickrey-Clarke-Groves mechanism, Groves-Ledyard mechanism, Hylland-Zeckhauser mechanism

JEL Classification: D72, D82

Suggested Citation

Tideman, T. Nicolaus and Plassmann, Florenz, Efficient Collective Decision-Making, Marginal Cost Pricing, And Quadratic Voting (August 25, 2016). Available at SSRN: https://ssrn.com/abstract=2836610 or http://dx.doi.org/10.2139/ssrn.2836610

T. Nicolaus Tideman

Virginia Polytechnic Institute & State University - Department of Economics ( email )

3021 Pamplin Hall
Blacksburg, VA 24061
United States

Florenz Plassmann (Contact Author)

SUNY at Binghamton, Department of Economics ( email )

Binghamton, NY 13902-6000
United States
607-777-4304 (Phone)

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