search query: @author Pesendorfer, M. / total: 2
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| Author: | Pesendorfer, M. |
| Title: | Pollution claim settlements under correlated information |
| Journal: | Journal of Economic Theory
1998 : MAR, VOL. 79:1, p. 72-105 |
| Index terms: | INDUSTRIAL PLANT POLLUTION COSTS |
| Language: | eng |
| Abstract: | Agents have to decide if a polluting plant will be operated or not. Agents' disutility (cost) from pollution is privately known, but correlated across agents. Incentive compatible mechanisms are characterized under the assumption that transfer payments are non-negative. The implementability constraint is similar to the independence case, except that virtual utilities are diminished by a factor due to the correlation of agents' types. As correlation vanishes, teh implementability constraint approaches the implementability constraint of the independent types environment. It is established that the free-riding problem is relaxed as the number of agents increases. With many agents, ex-post efficiency is achievable under ex-ante budget balance. |
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