In whose backyard? A generalized bidding approach

Abstract

We analyze situations in which a group of agents (and possibly a designer) have to reach a decision that will affect all the agents. Examples of such scenarios are the location of a nuclear reactor or the siting of a major sport event. To address the problem of reaching a decision, we propose a one-stage multi-bidding mechanism where agents compete for the project by submitting bids. All Nash equilibria of this mechanism are efficient. Moreover, the payoffs attained in equilibrium by the agents satisfy intuitively appealing lower bounds..externalities, bidding, implementation