Implementing Lindahl Allocations in a Warm-Glow Economy

Abstract

We provide a novel mechanism that delivers efficient provision of public goods in an economy that may display warm-glow preferences. No information about the fundamentals of the economy is required on the mechanism designer's side, so the mechanism is informationally decentralized. The mechanism is individually rational, single-valued, feasible and continuous, and the Nash equilibria of the mechanism coincide with the Lindahl equilibria of the economy. When no warm-glow preferences are present in the economy, the mechanism fully implements the classical Lindahl allocations.