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Published February 2002 | public
Journal Article

The approximation of efficient public good mechanisms by simple voting schemes


This paper compares the performance of simple voting rules, called referenda, to the performance of interim efficient mechanisms for the provision of a public good. In a referendum, voters simply vote for or against the provision of the public good, and production of the public good depends on whether or not the number of yes votes exceeds a prespecified threshold. Costs are shared equally. We show that in large populations for any interim efficient allocation rule, there exists a corresponding referendum that yields approximately the same total welfare when there are many individuals. Moreover, if there is a common value component to the voters' preferences, then there is a unique approximating referendum.

Additional Information

© 2002 Elsevier. Received 29 March 2000; accepted 9 September 2000. This is a revision of a paper entitled 'Voting is Approximately Optimal.' We are grateful for the support of the National Science Foundation and of the New Millennium Program of the Jet Propulsion Laboratory of NASA. The second author is grateful for the hospitality and research support at LEI-CREST. We thank two anonymous referees for their comments.

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