Robust Private Supply of a Public Good

TL;DR

This paper investigates the design of robust mechanisms for selling public goods when the seller only knows the agents' value expectations, focusing on worst-case revenue guarantees in correlated private value settings.

Contribution

It characterizes maxmin public good mechanisms under dominant strategy incentive compatibility and individual rationality, for both two-agent and certain multi-agent scenarios.

Findings

Identifies maxmin mechanisms for two agents.

Extends characterization to specific multi-agent cases.

Provides a framework for worst-case revenue analysis.

Abstract

We study the mechanism design problem of selling a public good to a group of agents by a principal in the correlated private value environment. We assume the principal only knows the expectations of the agents' values, but does not know the joint distribution of the values. The principal evaluates a mechanism by the worst-case expected revenue over joint distributions that are consistent with the known expectations. We characterize maxmin public good mechanisms among dominant-strategy incentive compatible and ex-post individually rational mechanisms for the two-agent case and for a special $N$-agent ($N>2$) case.