CFDP 1511

Overcoming Participation Constraints


Publication Date: May 2005

Pages: 26


In incomplete information environments with transferable utility, efficient outcomes are generally implementable unless interim or ex post participation constraints are imposed on the problem. In this paper we show that linking a sufficiently large number of independent but possibly unrelated social decisions, a slightly perturbed Groves mechanism can implement an efficient outcome with probability arbitrarily close to one, while respecting all participation, incentive and balanced budget constraints.


Linking, Participation constraints, Perturbed groves mechanism

JEL Classification Codes: D61, D82, H41