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The Efficient and Fair Approval of “Multiple‐Cost‐Single‐Benefit” Projects under Unilateral Information
Author(s) -
KAHAVA,
MEALEM YOSEF,
NITZAN SHMUEL
Publication year - 2009
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/j.1467-9779.2009.01440.x
Subject(s) - beneficiary , government (linguistics) , economics , complete information , simple (philosophy) , business , opportunity cost , mechanism (biology) , actuarial science , microeconomics , finance , linguistics , philosophy , epistemology
This paper focuses on indivisible “ multiple‐cost‐single‐benefit ” projects that must be approved by the government. A simple mechanism is proposed that ensures an efficient and fair implementation of such projects. The proposed mechanism is appropriate for a unilateral information structure: the single beneficiary has complete information on the cost and benefit of the project while the government official has no such information and the cost bearers have information only on each other's costs.