Maximizing social welfare in congestion games via redistribution

Naroditskiy, Victor and Steinberg, Richard ORCID: 0000-0001-9636-472X (2015) Maximizing social welfare in congestion games via redistribution. Games and Economic Behavior, 93. pp. 24-41. ISSN 0899-8256

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Abstract

It is well-known that efficient use of congestible resources can be achieved via marginal pricing; however, payments collected from the agents generate a budget surplus, which reduces social welfare. We show that an asymptotically first-best solution in the number of agents can be achieved by the appropriate redistribution of the budget surplus back to the agents.

Item Type:	Article
Official URL:	http://www.sciencedirect.com/science/journal/08998...
Additional Information:	© 2015 Elsevier Inc.
Divisions:	LSE
Subjects:	H Social Sciences > HC Economic History and Conditions Q Science > QA Mathematics
JEL classification:	C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information
Date Deposited:	20 Jul 2015 11:11
Last Modified:	14 Apr 2024 20:54
URI:	http://eprints.lse.ac.uk/id/eprint/62771

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