Strategy-proofness and public good provision using referenda based on unequal cost sharing

Abstract

The paper studies strategy-proof cost sharing rules for public good provision based on referenda with different threshold quotas. By appropriately relaxing the assumptions of individual rationality and anonymity we provide a complete characterization of the family of quota rules with (possibly) unequal pricing. We prove that these quota rules are the only cost sharing rules satisfying four conditions: strategy-proofness, non-bossiness, weak continuity and weak anonymity. In addition, the specification of the degree to which individual rationality may be violated results in the selection of a specific “quota” for the referendum. While all these rules are “almost” always efficient when providing the public good and they are also almost everywhere coalitionally strategy-proof, only one family of rules from this class satisfies these two properties everywhere. The rules satisfying these two properties are Moulin’s Conservative Equal Costs Rule and unequal cost sharing variants of Moulin’s rule.