IZA DP No. 4181: The Efficient and Fair Approval of "Multiple-Cost - Single-Benefit" Projects under Unilateral Information
published in: Journal of Public Economic Theory, 2009, 11 (6), 947 - 960
This paper focuses on indivisible multiple-cost–single-benefit projects that must be approved by the government. A simple mechanism is proposed that ensures an efficient and fair implementation of such projects. The proposed mechanism is appropriate for a unilateral information structure: the single beneficiary has complete information on the cost and benefit of the project while the government official has no such information and the cost bearers have information only on each other's costs.