Efficient Collective Decision-Making, Marginal Cost Pricing, And Quadratic Voting
33 Pages Posted: 11 Sep 2016
Date Written: August 25, 2016
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: Suggested Citation